Thread: Pilgrim's Pride Town Stays Calm Despite Bankruptcy

Pilgrim's Pride town stays calm despite bankruptcy

By PAUL J. WEBER, AP
posted: 4 HOURS 20 MINUTES AGO

PITTSBURG, Texas -Lonnie "Bo" Pilgrim drives a few miles down U.S. Hwy. 271 some Saturdays, buys a $3.99 oatmeal breakfast at Herschel's Restaurant and hands out $20 bills along with "Jesus Saves" pamphlets.
The 80-year-old founder of Pilgrim's Pride Corp. is a hero in this town of 4,600, where he built a small East Texas feed store into the nation's largest chicken producer. Many who live here are now betting on Pilgrim to rescue his company from the Chapter 11 bankruptcy protection it filed for on Monday.

Perhaps nowhere will the restructuring be felt more than Pittsburg, where Bo Pilgrim's first feed store is now a neglected local landmark. Its boarded-up windows and unkempt driveway serve as a reminder of what the town might look like had Pilgrim not cornered nearly a quarter of the U.S. poultry market.

"Without Bo and his chickens," said Joe Bailey, a 71-year-old land developer in Pittsburg, "we wouldn't be much."

Pilgrim's Pride employs about 5,000 people at its headquarters and plants in and around Pittsburg, a leafy community about 130 miles east of Dallas. Dozens of chicken farms dot the bucolic farmland in Camp County, and 18-wheelers hauling rattling chicken cages clang down the rural roads.

Job growth at Pilgrim's Pride was so robust five years ago that a shuttered school campus reopened, and Pilgrim's Pride pledged $130,000 annually to help pay the debt. The money isn't coming this year, Pittsburg school superintendent Judy Pollan said.

City leaders are unsure if Pilgrim's Pride will be on time with $172,000 in taxes that provide one-fifth of Pittsburg's revenue. Tim Nicholson, who tends a farm with 75,000 chickens that will become store-bought Pilgrim's Pride breasts, is unsure what the bankruptcy filing means for him.
But like many in Pittsburg, he said he's not worried.

"I have a lot of faith in Bo," Nicholson said. "I think he'll pull through."
Bo Pilgrim is an unavoidable presence in Pittsburg. Downtown is a 75-foot prayer tower Pilgrim gave as a gift to the city; landscapers in trucks marked with the Pilgrim's Pride logo keep the grounds spotless. In front of the tower is Pilgrim's Bank. To the left is the Pilgrim's Community Room.

The skyline is a lone feed mill with a presence as large as the 30 million-pound capacity food freezer across from the company headquarters. Down the highway is Pilgrim's lavish mansion that locals call "Cluckingham Palace" — the iron-gate entrance is cut in the shape of Pilgrim's signature silhouette.

Outside of Pittsburg, Pilgrim has no shortage of critics — environmentalists concerned about Pilgrim's plants and government watchdogs wary of his political influence. But in Pittsburg, many seem to be banking on Bo.

At Herschel's Restaurant — which used to operate under the Pilgrim brand, too — assistant manager Woodine Strawn said the Pilgrim's Pride regulars who stop in for lunch don't give a hint of worry. She's confident the company will survive, but guessed her store would go out of business if it didn't.

"It would look like a ghost town," said Strawn, who says Pilgrim stops by the restaurant many weekends. "There ain't nothing else here that can keep Pittsburg up."

Pilgrim's Pride said in a filing that it had $3.75 billion in assets and $2.72 billion in debts as of Sept. 27. The chicken producer has been hobbled by the debt from its $1.3 billion acquisition of rival Gold Kist Inc. in 2007, what analysts cite as the primary cause of its large debt load.

Its financial problems have been evident for months. Many of the nation's meat producers have seen their profits shrink in the wake of high commodity prices for items like corn and oil. An oversupply of meat on the market and dropping restaurant demand has hurt too.

Pilgrim's Pride spokesman Ray Atkinson said the company intends to pay its taxes. The matter is a concern for some local officials; Pollan, the school superintendent, said she'll be refurbishing three old school buses instead of buying new ones at $90,000 apiece.

But many in Pittsburg still feel better days are ahead.

"He's a fighter. He'll stick with it," Camp County Judge Thomas Cravey, the county's top elected official, said of Pilgrim. "I don't see this as the end for Pilgrim's Pride."

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