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Smithfield Foods to cut 1,800 jobs, close six plants, including one in Elon

Posted February 17, 2009

— Pork producer Smithfield Foods said Tuesday it plans to cut 1,800 jobs and close six factories, including one in Elon, N.C., as part of a restructuring.

The Elon closing affects 160 workers.

“This was a very difficult decision for the company,” said Timothy Schellpeper, president of Smithfield Packing. “We are proud of the workers of Elon and the plant’s record of performance. Unfortunately, we need to find ways to improve our operating efficiencies to remain competitive. And this often means consolidating operations.”

Smithfield Foods Inc., based in Smithfield, announced the closures and layoffs as part of a plan to consolidate and streamline its pork business. The company plans to save $125 million a year by 2011.

To help fund the restructuring, the company will take a pre-tax charge of $85 million in its fiscal third-quarter that ended Feb. 1, as well as another $30 million over the next three quarters. It will spend $53 million in capital expenditures related to plant consolidation.

The plants are expected to close by December 2009, the company said.

Chief Executive C. Larry Pope said Smithfield was switching its focus from "opportunistic acquisitions of high-quality companies at distressed prices" to being more efficient. He said the company would focus on growth of its high-margin packaged-meat business.

Also, the company refinanced its U.S. and European debt facilities to lower the cost of interest payments. Both agreements were reached within the past two weeks.

"This action should remove any question about the financial strength of Smithfield Foods," Pope said.

Smithfield will combine seven of its independent operating companies into three main units: The Smithfield Packing Co., John Morrell & Co. and Farmland Foods Inc. Further, John Morrell and Farmland will combine their sales forces.

Plants slated for closure include: Smithfield Packing Co. plants in Smithfield, Va.; Plant City, Fla.; and Elon, N.C.; as well as a John Morrell plant in Great Bend, Kan.; a Farmland Foods plant in New Riegel, Ohio; and an Armour-Eckrich Meats factory in Hastings, Neb.

The company said it would offer transfers to some employees.

44 Comments

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  • TheAdmiral Feb 17, 2009

    It is absolutely amazing that what I said about the unions and what the company will do is met with the call for "fear mongering" and "Hate Mongering"

    Well, ladies and gentlemen, I don't like to pound my chest, but...

    welcome to the world of Unions and the Democrat Socialist Agenda.

    CHANGE WE NEED!

  • GWALLY Feb 17, 2009

    GM...then Chrysler...Ford (most likely)....all will cut jibs and "restructure" (Magic ain't it ??)

  • beachboater Feb 17, 2009

    "Wow! And don't forget the $8 or $13 extra on your weekly check, what a joke that is." Handsome-ridge-road-jogger

    Hate to dissappoint, but that's the MONTHLY increase instead of weekly.

  • Ripcord Feb 17, 2009

    "Unions did a lot of good for workers in this country."

    Yeah, up until the 1960's. Not so much since then.

  • Ripcord Feb 17, 2009

    "What's with the union angle?"

    Smithfield Packing was recently the focus of a fairly big local story because emplyees at the local Smithfield p[lant wanted to unionize. I think that's why you're hearing about it.

  • ibbott41 Feb 17, 2009

    These troubled companies should use the “ Verify System” first. Get rid of the illegal workers in the first closings. And give American and documented workers a chance keeping them longer. Who knows maybe things will change

  • batcave Feb 17, 2009

    Their is no proof that union workers are better off than none---smoke and mirrors.

  • scorekeep Feb 17, 2009

    What's with the union angle? Some of the plants closing did not unionize. Many other businesses across the country, that have shut down or layed off, have never seen a union. Unions did a lot of good for workers in this country. If a labor union came to your workplace and got you a better wage,improved working conditions, made work safer, better medical, better retirement, you would not reject it.

  • Ripcord Feb 17, 2009

    Eduardo1... Yeah, PR wise you're probably right. But sooner or later the unionized plant will be shut down. The union itself will see to that.

  • Eduardo1 Feb 17, 2009

    ripcord..not really a good idea, to close that one first, to blatant. But that one shall go in the next round,so appearance wise, it was just another DOWNSIZE, rather than management being accused of anything anti-union. Smart move by Smithfiesl management. Sure is grEat to have union protection. If UAW, they will play ball, until we are in another 4-5 trillion in debt.STIMUULS HAH!

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