Smithfield Closing Elon Plant, Five Others

If the building looks like it's been around for a while, that's because it has. Before it was purchased by Smithfield in 2001, this was the original Stadler's Country Ham facility built back in 1955. I'm sure many reading this have eaten said ham, but you probably have no idea how connected our community is (was) to this business. But by the end of the Summer, that connection will be forever severed.

Citing issues such as a drop in sales and high grain prices associated with food-based ethanol, Smithfield Foods is "restructuring":

Here's a rundown of the affected plants:

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The Smithfield Packing Co. South facility in Smithfield, Va., is slated to close in December. Of 1,375 employees, 1,035 will be offered transfers.
*
A Plant City, Fla., facility will close in September, affecting 760 employees. Some salaried employees will be offered transfers.
*
The Smithfield Packing Co. plant in Elon, N.C., will close in late summer. About 160 employees will be affected.
*
A John Morrell plant in Great Bend, Kan., will close in July, affecting 275 employees.
*
A Farmland Foods plant in New Riegel, Ohio, will close in April, affecting about 230 employees. Some salaried employees will be offered transfers.
*
An Armour-Eckrich Meats plant in Hastings, Neb., will close in July, affecting about 370 employees.

My first reaction when I heard about this on the radio yesterday was, "union-busting", as this decision happened so soon after the Tarheel plant voted to unionize. But it appears (on the surface) to have affected both union and non-union shops and personnel, and (so far) the Tarheel plant doesn't seem to be affected. It also appears that the 1,035 Virginia workers that Smithfield is taking pains to relocate are mostly union members, so it's entirely possible that Tarheel voted in the union just in the nick of time.

Union questions aside, I wanted to step back and focus a little on global issues, and how they may affect Smithfield's U.S. operations. Up until very recently, Smithfield has been engaged in a vigorous and often devious campaign to expand their operations worldwide:

In France:

Smithfield, through its
company SBS, bought out French cold meat
producer Jean Caby in May 2004, which a
news report said —is expected to create the
biggest group in the (cold meat) sector in
France,“ producing 95,000 tons a year.

Brazil:

Smithfield made a commit-
ment in 2001 to invest $100 million in pig
production in the state of Mato Grosso, after
the state‘s government provided tax incen-
tives.
As of 2004, Smithfield was operating
a new farm with 15,000 hogs 150 miles west
of Cuiaba in Mato Grosso

Mexico:

Smithfield also is a growing player in the
pork business in Central and South America.
Smithfield shelled out $24 million for its
share in Agroindustrial del Noroeste in Mexico, where the minimum wage for work-
ers is $1 an hour. Smithfield is now Mexico‘s
third largest pork producer, with 18,000 hogs
in Sonora and 14,500 in Vera Cruz as of
2001.

Poland:

Smithfield‘s holdings in Poland are
particularly extensive. Its Animex operator,
which took in $338 million in 2003, sells
nine brands of meats to Poles, operates six
subsidiary companies and seven processing
plants, and has a payroll of 5,300 people.

I think you're beginning to get the picture. Smithfield is huge—by far the biggest pork processor in the world. With their foreign operations running full blast, processing pork for a fraction of what it costs here in the U.S., where do you think Smithfield will cut jobs in a worldwide economic slump? Unfortunately, that was an easy one to answer.

This is about a mile down the road from the doomed plant:

I know it seems a little desolate, but that's because they're in class right now. About a half-hour before this, I got stuck at a few pedestrian crossings and witnessed the migration of the studentbeeste. :)

So, as I watched the book-clutching students striding purposely (Elon's not easy), I found myself wondering: what kind of future do they have? Will they join the ranks of the unemployed after graduation? Go to work for their family business? What do they think about Globalization? Will they take their MBA's and become a part of the problem, or a part of the solution?

Comments

Beautiful ... and sad

Those students most likely will join the ranks of the unemployed after graduation, though many will try to extend their schooling into master's and Ph.D. programs. It's going to be tough.

The market extremists will love it, though. They'll use every fact they can find to show that too many people are going to college, decimating the ranks of the permanent underclass on which the robber barons depend for cheap labor. Keep 'em at home, keep 'em uneducated, keep 'em out of unions and all will be well for the bottom line.

____________________________________

We are not amused.

The University System

But don't "market extremists" have a point when they are critical of the modern university system? College degrees are becoming more and more meaningless. Many schools are as much sports franchises as they are places of learning. Is sending young people off to live in brick and mortar dormitories on campuses that take millions of dollars to maintain really the most efficient way of providing the service of higher level education? Or is it a relic of an outdated education model that is being artificially propped up by government intervention?

Most free market theorists believe that unions are a product of the free market of voluntary exchange just like any other voluntary organization (they just don't agree with laws that either restrict or empower either unions or companies).

As for the permanent underclass, poverty rates were decreasing until the great society initiatives. And if people are uneducated, is there no blame for the public education system?

----------------------
"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

They do have a point

I am not generally a fan of the modern university system or the feeding frenzy that pushes so many students through the same curriculum grinder. It is indeed an outdated model and I suspect the "market" will eventually correct itself as we see the declining return on our public investments.

That said, the privatization alternative (the market alternative) is even less appealing. It inevitably co-mingles church and state, directing taxpayer dollars into faith-based "thinking" that undermines society's ability to make rational choices.

________________________

Maybe you and I could cut a deal. You lead the charge on eliminating any and all legal rights of corporations, boards of directors, management teams, etc., and I'll entertain your fantasies about poverty and unions.

____________________________________

We are not amused.

Alright

I'm a little confused as to how privatization leads to the co-mingling of church and state - isn't the whole idea of privatization the removal of the state? I would agree with you that faith-based private education institutions are generally just as bad, if not worse, than public institutions at the k-12 level. For now, I'm just talking about the university level, and I don't see the market replacing colleges with faith-based institutions of higher education. Instead, I see online education as well as community college and ECPI-like models arising as the most efficient method of providing education.

----------------------
"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

I was thinking more than I was writing

Not sure why I went off on a tangent. This really wasn't what you were talking about. But just to be clear:

School privatization > Vouchers > Taxpayer funding for private schools > Taxpayer funding for religious institutions > Creationist curricula > Further dumbing down of America sponsored by taxpayers

From what I know about strategic planning in the UNC system, all sorts of innovations are in the pipeline. Old thinking about "distance learning" is being upgraded and challenged ... and many new initiatives are gearing up. I expect to see a whole range of hybrid options for learning developed over the next couple of years. It'll take awhile to refine them, but it'll happen.

The larger question about who should go to college in the first place is trickier. Companies in the free market - and government organizations alike - have put college education on the checklist for jobs of every size and shape. Until that changes, students everywhere will need to get that ticket punched one way or another.

_____________________

By the way, employers are also the source of our current healthcare crisis, in my opinion. Years ago, they made the strategic decision to use "benefits" as a competitive battleground, setting into motion a system that has wrongly linked having a job to having access to decent healthcare. I wish businesses would unilaterally get out of the healthcare arena tomorrow. That disruption would single-handedly create universal healthcare in a heartbeat.

____________________________________

We are not amused.

I agree, to some degree

Vouchers are actually opposed by many "market extremists" because the sever between the state and education is not complete. I believe in separation of state and school just as I believe in the separation of church and state. Just as an education from a religious institution is going to be tainted by an ideological agenda, a state will also reinforce a particular paradigm (that generally paints the state in a favorable light). The problem is that the state educates over 80% of all children. That's a near monopoly, and that's dangerous.

Distance learning is great, but in addition to traditional models attempting to adapt it would be nice if start-ups could compete more easily. University of Pheonix is a good example, in my opinion. I think one thing that could be done is a relaxing of the accreditation system so that there are competing measures of accreditation and less difficulty in entering the higher education market.

As for employment-based health care, you are almost totally on the mark except for one key detail. It was the federal government, by capping wages and creating tax incentives (that individuals and employees never received), that encouraged businesses to include health care benefits as a substitute for higher wages (which the employees could have used to purchase their own insurance). This encouraged union-management agreements on health care coverage. You are right though, it makes absolutely no sense, just as it would ridiculous for employers to provide car insurance. This is yet another example of the perverse and unforeseen consequences of government intervention. Health care would be affordable for almost everyone (the remainder being easily covered by charitable voluntarism) were it a product primarily purchased by individual consumers. Just look at how car insurance works. They don't cover every oil change, just as a sensible health care plan wouldn't cover basic trips to the doctor. You don't have to wait in line to get a rental car either.

----------------------
"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

Bad analogy

Just look at how car insurance works. They don't cover every oil change, just as a sensible health care plan wouldn't cover basic trips to the doctor.

Automobile insurance only covers accidental damage to the car—they don't care if your motor wears out. A better analogy (but still off) would be a warranty. The warranty requires that you follow basic service steps (oil & filter change) which are proven to extend the life of the motor. If it can be demonstrated that you failed to do so, the warranty is voided. Health care is similar, in that well-care visits have been proven to extend the life and reduce future costs by treating issues before they result in catastrophic health failure.

And I have to say, naive speculation like this:

the remainder being easily covered by charitable voluntarism

is presuming a factor not in evidence. Even if this cheaper health insurance were available, cutting our uninsured and underinsured ranks by half, that would still leave around fifty million people nationwide without coverage. There are something like 1,850 free clinics in the country, which would mean each clinic would be responsible for over 27,000 people.

Where are all these "extra" volunteers we'll need? Are they not volunteering because we don't need them yet? Oh, we need them. Are they not volunteering because they're pissed off at government interference in health care? Nah. Are they not volunteering because of all those GD taxes they have to pay? I...don't think so. Are they not volunteering because we're devaluing our currency and need to get back to the gold standard? Maybe that one doctor in Montana.

What's my point? Our fairy godmother is not going to fix health care, we have to do it. That "we" is our duly elected government.

Keep in mind,

the university I referenced in this diary (Elon) is a private school. It was originally a relatively small (Christian) college that has grown in stature by focusing on academics, often ranking within the top 100 schools in the nation. They got that way by competing with other private schools as well as public schools. In turn, public universities have to compete with private schools as well. This dynamic forces each to keep up with current scholarship (worldwide) and explore innovative techniques to deliver their product.

Now, you might say that scholarship is a self-perpetuating phenom which values form over substance too much, and that more emphasis should be placed on specific vocational training via the efficient (and less expensive) methods you mentioned. But that, my friend, is social engineering, and would stifle innovation more than promote it.

In reality, many who oppose scholarship do so because of ideological issues, not economic ones. If you took away the study of Humanities, which often lead thought in the direction of Socialist ideas, those who oppose universities would be much more comfortable with the money spent and the degrees achieved, even though the education itself required less abstract/critical thinking. It's comfortable, but regressive, and the end result would actually bring us closer to the "bad" side of Socialist thought.

Why? Because those skills teach the student discretion. It's what makes them capable of seeing through rhetoric to demand more, such as the "why". In the absence of this nurtured curiosity, the morality of a given issue is seldom explored. Ergo, a social structure emerges which is based on a constructed ideology which citizens no longer have the ability to challenge. I believe you mentioned the USSR earlier...

What will all the little piggies do?

Will they all move to Poland too? North Carolina is currently home to 5,463,857 hogs. I can't imagine that it's sound business practice to ship them to places to be processed.

Progressives are the true conservatives.

Piggies

Those numbers were from 12 years ago. According to the Dec 2008 USDA Hog Report for NC hogs and pigs totalled 9.6 million.

We have more hogs than people in NC and hogs produce twice as much poop.

I guess it's a mixed blessing

that Smithfield and many oinkers are shuffling off to the nether regions.

Progressives are the true conservatives.

With the new rules

going into effect this year (liners, covers, etc.), I wonder if that population might start to drop in the near future?