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More Cuts and Changes at Pilgrim’s Pride

by 5m Editor
16 July 2008, at 10:06am

US - Pilgrim's Pride is to consolidate its tray-pack business from El Dorado with the loss of 600 jobs, and to close it distribution centre in El Paso.

Pilgrim's Pride Corporation has announced plans to consolidate the tray-pack chicken business from its El Dorado, Arkansas, processing plant into six other case-ready facilities. Following the transition, which is expected to be completed within 60 days, the El Dorado facility will operate as a supply plant.

Approximately 600 of the 1,215 positions at the El Dorado plant will be eliminated by 19 September 2008. Most of the positions eliminated will be hourly jobs in chicken processing. Contract growers and employees in live operations will not be affected. Pilgrim's Pride will provide transition programs to employees whose positions are eliminated to assist them in securing new employment, filing for unemployment and other applicable benefits.

"Since March, we have been conducting a thorough review of all our production facilities to ensure we are operating as efficiently as possible in response to the unprecedented challenges facing our company and our industry," said Clint Rivers, Pilgrim's Pride president and chief executive officer.

"We are confident that the changes announced today, which conclude the formal review of our operations, will help position Pilgrim's Pride as a stronger competitor. By consolidating the tray-pack volume from El Dorado into our six remaining case-ready plants, we can position our entire case-ready division to operate more efficiently. As a supply plant, our El Dorado facility will be able to take full advantage of its efficient live-production cost structure to help us deliver even better value to our customers."

In April, Pilgrim's Pride acknowledged that the El Dorado plant was among those being reviewed for possible closure or consolidation. Over the past several months, the company had been working with elected officials and the union representing members at the plant to improve its financial performance. However, union members recently rejected proposed benefits changes that would have made the plant more competitive.

Separately, the company also announced plans to close its distribution center in El Paso, Texas, within the next 60 days. That facility employs approximately 34 people. Following the closing, Pilgrim's Pride will operate a total of six distribution centers in Texas, Arizona and Utah.

"While the decision to close or consolidate locations is always difficult, we believe the actions we are announcing today are absolutely necessary for our business and our company," said Mr. Rivers.

The company does not expect to incur any material financial charges related to the announcements today.

5m Editor