About 1,600 people ultimately could lose their jobs because of the J.R. Simplot Company's decision to consolidate three Idaho potato-processing plants into a newly built one.

The company plans to lay off at least 800 employees in Nampa, Caldwell and the small southeast Idaho town of Aberdeen. That's about one-fourth of Simplot's Idaho workforce.

A Boise economist says one layoff actually can cost two jobs because of the ripple effects caused by the loss of one worker's income.

The layoffs are bad news for an Idaho economy that remains weak despite the slight uptick in Idaho's employment reported last month.

What is Simplot doing?

The company said Thursday that it will close its aging plants in Nampa and Aberdeen, and build a new, more modern plant in Caldwell to replace the plant there.

The three plants produce items like potato nuggets, hash browns and french fries sold to restaurants and through distributors around the world.

"We struggled with this very difficult decision, and we know the closures will have an impact on many of our employees and their families," CEO Bill Whitacre said.

Despite the loss of jobs, Caldwell Mayor Garret Nancolas said things could have been worse for Caldwell, pointing to the millions of dollars that will be invested in the new plant.

"From an investment standpoint, that means they are going to be in Caldwell for years and years and years to come," he said. "There is the good news in the midst of the not-so-good news."

The company expects to lay off workers over the next two to three years. Construction on the new plant is expected to begin in May and be completed by 2014. It will employ 250 people.

Company officials say they hope to hire about 200 of the 250 workers for the new plant from the 1,000 employees now working in the three plants. Exactly who will be hired isn't yet known, spokesman David Cuoio said.

What kind of jobs are being lost?

They range from hourly production-line jobs to salaried managers and supervisors, Cuoio said.

The Caldwell plant will have to close to allow for construction of the new plant. Those jobs will likely be eliminated first, although the timing is unclear, Cuoio said.

Simplot employs about 10,000 people around the world, including 3,300 in Idaho.

If Simplot lays off 800 people, how does that result in 1,600 jobs being lost?

It's called the multiplier effect. As employees are laid off, they will spend less at local grocery stores, gas stations and restaurants. That could result in those businesses downsizing.

Boise economist John Church estimates that the communities will lose another job for every person who is laid off.

The layoffs could be especially devastating for Aberdeen, which has few other employers, said Garth Taylor, associate professor in the University of Idaho's College of Agriculture.

"This is truly, truly ugly," he said. "There are no other opportunities for employment - except the spud plant - in Aberdeen."

What about Nampa?

The job loss in Nampa comes after XL Four Star Beef Inc. closed its Nampa plant and eliminated more than 500 jobs in June. XL's co-CEO said the aging plant wasn't worth the cost required to keep it operating.

Canyon Country's unemployment rate hit 11.6 percent in September. But Nampa Mayor Tom Dale was optimistic Thursday.

"I think the good news in this is that Simplot is still committed to staying in the state of Idaho and the food industry," Dale said. "They are going to commit a great deal to this new plant, which will help the economic base."

The closure means Nampa must continue with economic development efforts to attract new jobs and industries, Dale said.

"My heart goes out to those people," Dale said. "There are no words to express how deeply this hurts."

Is concern about the health effects of fried potato products leading to the closures?

Simplot says no. Demand for processed potato products is flat, company officials say.

Simplot says it needs the new plant in Caldwell to remain competitive. Competitors have been building new plants with more production capacity and flexibility, and Simplot has slowly fallen behind, Cuoio said.

"Competition in the food industry has become challenging, with profit margins shrinking and costs continuing to rise," Whitacre said. "These factors and other considerations have made it important to the future well-being of our food business that we build this new plant."

The board of directors considered plant upgrades to bring them in line with current industry standards, but it was more cost-effective to build a new one, the company said.

What will the new plant cost?

Simplot declined to say. It said the plant would be the largest single investment the company has ever made in Idaho.

The plant will be built on the site of the existing Caldwell plant. It has excellent access to rail and road transportation, water, raw potatoes and labor, said Mark McKellar, Simplot Food Group president.

The company said the new plant will have a carbon footprint 20 percent smaller than the existing plants and will save a half-billion gallons of water each year.

Will Simplot qualify for any state incentives to construct the new building?

Cuoio said he is not aware of any.

What will be done for the workers?

The company is required by federal law to give employees 60 days' notice of layoffs. It met that condition when it notified its employees early Wednesday, said Bob Fick, spokesman for the Idaho Department of Labor.

Simplot will provide transitional support for the employees who will lose their jobs, Cuoio said, including separation packages, on-site counseling and placement services.

Is this the first big decision by the Simplot Co. since the death of founder J.R. Simplot in 2008?

Yes. But Cuoio doesn't think people should read any kind of passing of the torch into this decision. It was based on maintaining the long-term viability of the company.

Kathleen Kreller: 377-6418

It's a big deal. A lot bigger than people think.