UNITED STATES-TYSONS TO CLOSE MEAT PLANT.
Friday, meat producer Tyson Foods, Inc. said it is closing its Ponca City, Oklahoma processed meats plant and is shifting production to other company facilities as part of its efforts to improve operational efficiency. The Springdale, Arkansas-based company said the closure will affect about 580 people and is expected to result in a non-cash charge of about $0.02 per share to be reflected in the fiscal second quarter earnings.
The people who will be affected by the closure are being given a 60-day notice on Friday, and the company noted that the actual termination of operations and displacement of workers will take place gradually. The closing process will begin in late May and may be completed by July or August.
Representatives of Tyson’s Human Resources staff are expected to meet with affected Ponca City workers in the coming weeks to discuss other employment opportunities within the company. They will also work cooperatively with the Oklahoma Employment Security Commission, which will provide information about unemployment benefits and other job opportunities, Tyson Foods said.
The plant has been in operation since 1995, producing a variety of deli-style luncheon meats and ham products. The production, according to Tyson, will gradually be shifted to its plants in Buffalo, New York; Cherokee, Iowa and Houston, Texas. Tyson is trying to find a buyer for the Ponca City plant. Although company officials have been in contact with potential buyers, no sale has been completed.
Commenting on the decision, Dick Belsito, senior vice president of processed meats for Tyson Foods, said, "This is a very difficult decision because it affects the lives of our people, their families and the community; however, it is critically important to our business???This decision was based on improving asset utilization, not on their job performance."
The meat industry has been experiencing a tough time recently as prices of corn and soybean, the key ingredients of poultry feed, soared significantly in the past one year. To cope with weak demand and sulking profit margins, producers have cut production and increased prices.
