Thread: losses of $30m due to immigration raids -Swift & Co.

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Swift considers sale of company

By Ahmed ElAmin

24/01/2007- After registering losses of $30m due to immigration raids in December, Swift & Co. said this week it is now considering a variety of strategies for the future, including a sale of the company or a stock offering.

Meanwhile a union representing the workers and state legislators say the raids exposed flaws in a federal government program designed to help employers screen for illegal immigrants.

The raids -- and the costs -- have left many other meat processors wondering if they are next. The meat and poultry processing sectors are major employers of immigrant workers.

Swift, which claims to be the world's second-largest meat processor of fresh beef and pork, was the target of a federal immigration raid on December 12 at plants in Iowa, Texas, Colorado, Nebraska, and Minnesota. About 1,300 workers were arrested and taken out of the Swift workforce.

In a surprise statement this week the company said it has engaged JP Morgan to assist in a review of operations, which Swift said was initiated as a result of a series of " unsolicited inquiries" over the past six months. Swift's majority shareholder is HM Capital Partners.

"In the review process the Swift board will consider the full range of possible alternatives, including, among others, a possible sale, merger, strategic partnerships, refinancing and/or public equity offering," the company stated in a press release.

In its latest financial report Swift estimates the raids and the subsequent loss of employees will lead to costs of $20m resulting primarily from lost operating efficiency as new employees are retrained. The company also expects to spend an additional $10m on employee retention and hiring incentives, which is required to restaff the facilities with production employees.

The raids forced the company to suspend operations for up to seven hours as employees were interviewed by federal agents. Swift resumed production at all facilities but at reduced output levels, which are expected to be below historical levels over the near term, the company said in its fiscal second quarter report.

About 1,300 individuals were arrested by the federal immigration officials and removed from Swift’s domestic labor force, the company. No civil or criminal charges have been filed by the government against Swift or any of its current or former management employees, the company said.

Since the arrests, federal attorney general Alberto Gonzales said 148 allegedly illegal immigrants have been charged with using other peoples' Social Security numbers and other personal information to get jobs at Swift.

In related news the United Food and Commercial Workers (UFCW) union accused Swift and other meatpackers of exploiting immigrant workers by abusing a federal immigration program aimed at helping them ensure they have only legal employees on their books. The UFCW represents 1.4 million workers in the US, of which 250,000 work in the meatpacking and poultry industries.

" They are innocent victims in an immigration system that has been hijacked by corporations for the purpose of importing an exploitable workforce," the UFCW said about the arrested workers.

The federal government's Basic Pilot Program is an Internet service that allows eligible employers to check on the immigration status of their workers. It provides an automated link to the Social Security Administration database and federal immigration records. Employers who uses the pilot cannot be held liable for hiring an illegal worker. Participation in the program is voluntary.

The UFCW alleges that the pilot serves to absolve companies who hire illegal workers and allows them to fire them at will.

"These companies lure undocumented immigrants to the U.S. to create a low-wage, disposable workforce in this country," the union said in a statement. "They advertise for workers outside U.S. borders. They utilize labor contractors. They use current workers to recruit more workers. They pay immigrants less, offer fewer benefits, and threaten them with deportation if they stand up for better wages, working conditions, or try to organize a union."

Swift noted that its pay its US production employees more than twice the federal minimum wage, and offers " affordable and comprehensive health care benefits, and possesses industry-leading employee safety records".

The UFCW has called for comprehensive immigration reform that protects worker rights, ensures good wages and benefits, and recognizes their contributions. Meanwhile senators in the affected states this week said they plan to introduce legislation to fix some of the problems with the Basic Pilot Program.

Swift employs about 500 workers at its Greeley corporate headquarters, an additional 14,500 at other US locations, and a total of 20,000 worldwide.

Swift has about $9bn in annual sales. The company has beef and pork processing plants in six states and an operation in Australia. Earlier this month the company reported net sales of $2.47 billion for its fiscal second quarter ended November 26, 2006, up 6.9 percent from net sales of $2.31 billion in the comparable prior-year period.

The company registered a operating loss of $18 million for its beef division, while operating profits at its pork business remained flat at $26 million. Swift Australia's second-quarter operating profit increased to $25 million from $6 million over the comparable periods.

Last week Swift announced the launch of a programme to shave up to $15m in overhead costs.

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Sorry, I don't feel sorry for the illegals OR Swift. If you base your business on illegal labor you should expect the fall to come. Abide by the law and you'll have a stable business. No one was an innocent victim here.

Booo freakin Hooooooo
NOT !!!!
And I will not buy their products

I think Swift has a few more problems than losing 1300 illegal workers.

That's less than 1/10th of the workforce, severe restructuring because of the need to hire off the street workers seems like they're trying to blame ICE for mismanagement.

I read that after the raids, swift laid off more people, that's suspicious.

Originally Posted by Sovereign

I think Swift has a few more problems than losing 1300 illegal workers.

That's less than 1/10th of the workforce, severe restructuring because of the need to hire off the street workers seems like they're trying to blame ICE for mismanagement.

I read that after the raids, swift laid off more people, that's suspicious.

I'm in total agreement with you Sovereign.

This is baloney, pure & simple. Furthermore, $30 million is pocket change for Swift & co. Absolute pocket change and should be a mere blip on their profit screen. We're not talking about one small plant.

Something SMELLS here.

.

Absolutely, something smells alright.

There were some ex employees who were suing because they were replaced with illegals, I haven't seen a update though.

After registering losses of $30m due to immigration raids in December, Swift & Co