Swift finds out, cheap labor is not so cheap
http://www.9news.com/news/local/article ... ryid=62619
Swift estimates immigration raids could cost up to $30 million
posted by: Sara Gandy , Web Producer
created: 1/4/2007 2:13:10 PM
Last updated: 1/4/2007 2:20:44 PM
DENVER (AP) - Immigration raids that rounded up about 1,300 Swift & Co. workers at six meat plants last month could cost the company up to $30 million, officials said Thursday.
Greeley-based Swift said its preliminary estimate of the one-time impact of the raids included $20 million, mostly in lost operating efficiency as new employees are retrained, plus up to $10 million to retain workers and offer hiring incentives to add back production employees.
In Greeley, Swift placed newspaper ads offering new hires a signing bonus of $1,500.
Operations at the six plants were suspended six to seven hours on Dec. 12 while immigration officials interviewed employees, the company said.
Reduced production was expected at the plants in the near term, the company said in a news release. It did not say when production might be back to normal, and a company spokesman did not return a phone message seeking comment.
Swift officials planned to discuss the company's financial results for its latest fiscal quarter ended Nov. 26 in a conference call Friday morning.
With more than $9 billion in annual sales, Swift describes itself as the world's second-largest processor of fresh beef and pork products.
Privately held Swift on Thursday reported a net loss of $11.99 million for its latest fiscal quarter, narrowed from a loss of $17.86 million in the same period a year earlier.
It reported net sales of $2.47 billion for the quarter, up 6.9 percent from $2.31 billion in the same period a year earlier as beef prices rose 5.2 percent. Swift Australia sales increased nearly 16 percent to $511 million due to higher availability of cattle and more customer demand.
Immigration and Customs Enforcement agents raided plants in Greeley; Grand Island, Neb.; Cactus, Texas; Hyrum, Utah; Marshalltown, Iowa; and Worthington, Minn. The plants represented all of Swift's domestic beef processing capacity and 77 percent of its pork processing capacity.
U.S. Commodities Inc. President Don Roose said other companies filled the void in slaughtering following the raids at Swift plants, leading to little effect on meat prices at the grocery store.
"There's enough meat in the coolers and the supply chain that I don't think it had as much of an effect as it could've had if it was in shorter supply in the chain," Roose said.
Cattle Fax senior analyst Kevin Good said it would be difficult to separate what changes in meat prices were due to the immigration raids and what was due to other disruptions like the holidays and recent snowstorms.
The company has not released its daily slaughter rates from before and after the raids.
