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Tyson Foods Plans to Close Two Iowa Plants

January 13, 2006

By Pat Kinney, Waterloo-Cedar Falls Courier, Iowa

Jan. 13–WATERLOO — Approximately 400 workers in Independence and Oelwein will be out of a job March 17 with the closing of two meat processing operations.

Tyson Foods announced today it is closing the former Iowa Ham meat-processing operations in those cities, idling about 300 workers in Independence and another 90 to 100 in Oelwein. The Independence operation is one of that city’s largest employers.

The Independence plant had been in operation more than 50 years, and the Oelwein plant more than 40 years, under Iowa Ham and other owners.

Workers were notified of the closings today, company spokesman Gary Mickelson said. They will be given a chance to work at other Tyson facilities, including the 2,400-worker Waterloo pork plant, he said.

“We’re also considering having a job fair for team members so they’re also aware of the available job opportunities in the community,” Mickelson said. Details of that event are still being worked out.

“This is a tough decision because it affects the lives of nearly 400 team members. It affects the families as well as two great plant communities,” Mickelson said. “Given the age of the plants, and the investment needed for them to support future production needs, it was not economically feasible to keep them open.”

Tyson had been evaluating the Independence and Oelwein plants for about six months, Mickelson said.

“We thank our team members for their hard work and support of these plants,” said Bill Lovette, senior group vice president of poultry and prepared foods for Springdale, Ark.-based Tyson. “We’ll do our best to help them as they seek other employment at another Tyson location or with other employers in the area.”

The Independence and Oelwein plants are 126,000 and 43,000 square feet, respectively. Both plants will be offered for sale, Tyson officials said.

Business leaders in Independence and Oelwein only heard of the plant closings today.

Tammy Shaffer, president of the Independence Area Chamber of Commerce, said the decision to close was “unfortunate.”

“Independence will be sorry to lose them,” Shaffer said.

Shaffer hopes the Independence plant will not remain vacant long.

“My hope is that someone will take advantage of that facility and be able to bring a comparable business in,” Shaffer said.

Sally Falb, executive director for Oelwein Economic Development, said the news comes as a surprise and could impact quality of life.

“We are extremely disappointed. This is devastating to our community to lose important jobs for families,” Falb said. Despite the setback, she pledged to work on finding jobs for families.

“We will want to see what we can do to fill those facilities … so our local citizens have jobs to go to,” she said. Falb added area economic developers have some prospects interested in the area.

“We hope to have good news is a few months,” Falb said.

Ted Harms, rapid response coordinator with Iowa Workforce Development, said the announcement was sad.

“What a way to start the morning on Friday the 13th,” Harms said.

With a plant closing of this size, Tyson is required to give the state 60 days’ notice before the plant’s final date, under the federal Worker Adjustment and Retraining Notification Act of 1988, also known as the “Warn Act.” Once the state receives the notice, preparations for a rapid response team will be made. Rapid response assists displaced workers in finding employment as soon as possible after a plant closing or mass layoff.

“I will gather the very same rapid response team that I’m going to gather for the APAC closing,” in Waterloo, announce earlier this week, Harms said. APAC Customer Services announced Monday it will close its Waterloo call center in mid-March, eliminating nearly 300 jobs.

IBP inc. bought the Oelwein and Independence plants in late 1999. IBP was acquired by Tyson in 2001. At the time of the acquisition, IBP officials said they had no plans to lay off workers.

Tyson announced the closings concurrent with plans to reinvest in, and move production to, operations in Cherokee, as well as plants in Concordia, Mo., and Buffalo, N.Y. Tyson will spend $30 million to add bacon production at Cherokee, and ham operations there are being moved to Concordia and Buffalo. Production at Independence and Oelwein similarly is being moved to other Tyson facilities. In addition to Concordia and Buffalo, Tyson also has processed meat plants in Ponca City, Okla., and Houston. About $15 million has been invested in the Buffalo facility over the past two years.

The two plant closings and investments in other facilities are projected to save Tyson $15 to $20 million before taxes, or 3 cents per share. The company is publicly traded on the New York Stock Exchange.

The moves also will result in the temporary idling of some 50 unionized workers at the 650-employee Cherokee plant over the next several months, company officials said. The Independence and Oelwein facilities are nonunion plants.

Staff Writers RC Balaban and Brian Spannagel contributed to this article.

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