Tyson Foods is closing two plants in the Midwest, costing about 880 workers their jobs, the company announced Thursday.
"We examined many options before we turned down this road," said Donnie King, president of North American operations for Tyson Foods, in a statement. "This affects the lives of our team members and their families, making it a very difficult decision. But after long and careful consideration, we've determined we can better serve our customers by shifting production and equipment to more modern and efficient locations."
The plants are to stop production in the second half of the company's current fiscal year, which ends Oct. 1, 2016.
The announcement comes days before the company releases its latest quarterly earnings and a week before Thanksgiving and the start of the Christmas-shopping season.
Bob Williams, senior vice president at Simmons First Investment Group, said the company couldn't have pushed the announcement back any further as holidays start approaching.
"It's a lose-lose situation," he said. "You might as well do it before the holidays and let people start adapting."
About 400 workers at a pepperoni plant in Jefferson, Wis., will be out of work because of the announcement.
Tyson is the largest supplier of pepperoni and meat-pizza toppings in the country, according to the company's website.
The Jefferson plant came under Tyson management when the company purchased IBP Inc. in 2001.
Since Tyson's acquisition of IBP, Tyson has encountered clashes at the Jefferson plant in regard to worker issues and labor unions. Unionized workers at the plant went on strike for 11 months in 2003, and in 2013 six hourly employees filed a class-action suit against Tyson Foods.
A Jefferson County, Wis., circuit judge found that the employees were entitled to compensation for the time they spent at the plant putting on and taking off the sanitary and protective equipment and clothing required by Tyson.
The announcement also will affect 480 employees at a plant in Chicago that makes prepared foods for the hospitality industry.
Tyson bought the Chicago plant in 1994. The plant, which made meals exclusively for airlines, now produces tempura chicken, meatballs, crepes, omelets, sauces and chicken cordon bleu.
None of Tyson's other Chicago facilities and offices are affected by the announcement.
The company said the closures are due to changing product needs, the age of both facilities and the high cost of renovating them. Tyson also cited the Chicago plant's distance from its raw-material base.
Williams said the airline meals made by the Chicago plant have become rare since airlines started cutting back after the 9/11 terror attacks in the U.S. in 2001.
"It's just not cost-efficient because the world has changed," he said. "When I grew up, everyone got a free meal in any flight over 2 1/2 hours."
Business on 11/20/2015