Who’s to Blame for a Factory Shutdown: A Company, or California?

Who’s to Blame for a Factory Shutdown: A Company, or California?

VERNON, Calif. — Teresa Robles starts her shift around dawn most days at a pork processing plant in an industrial corridor four miles south of downtown Los Angeles. She spends eight hours on her feet chopping guts, a repetitive motion that causes her constant joint pain, but also an hourly income of $17.85 that supports her family.

So in early June, when whispers began among the 1,800 workers that the facility would soon close, Ms Robles, 57, hoped they were just rumours.

“But it was true,” she said grimly at the end of a recent shift, “and now every day is getting a little closer to my last day.”

The 436,000 square foot factory, whose roots go back nearly a century, is expected to close early next year. Its Virginia-based owner, Smithfield Foods, says it will be cheaper to supply the region from factories in the Midwest than to continue operations here.

“Unfortunately, the escalating costs of doing business in California necessitated this decision,” Smithfield chief executive Shane Smith said, citing utility rates and a voter-approved law regulating how pigs can be accommodated.

Workers and company officials see a bigger economic lesson in the impending shutdown. They just differ on what it is. For Ms Robles, it is proof that despite years of often perilous work, “we are just disposable for them”. For the meatpacker, this is a case where politics and regulation trump commerce.

The cost of doing business in California has been a long-standing point of contention. He was quoted last year when Tesla, the electric vehicle maker that has been a Silicon Valley success story, announced it was moving its headquarters to Texas. “There’s a limit to how big you can scale in the Bay Area,” Tesla chief executive Elon Musk said, citing housing prices and long commutes.

Like many economic arguments, this one can take a partisan turn.

At the time of Tesla’s exit, a report from Stanford University’s conservative Hoover Institution found that California-based companies were leaving at an accelerating rate. In the first six months of last year, 74 corporate offices moved from California, according to the report. In 2020, according to the report, 62 companies were known to have moved.

Dee Dee Myers, senior adviser to Governor Gavin Newsom, a Democrat, countered by pointing to California’s continued economic growth.

“Every time this narrative comes up, it is consistently refuted by the facts,” said Ms. Myers, director of the Governor’s Office of Economic and Business Development. The country’s gross domestic product grew at an annual rate of 2% over a five-year period to 2021, according to Myers’ office, while California’s rose 3.7%. The state is still the technological capital of the country.

Still, manufacturing declined faster in California than in the country as a whole. Since 1990, the state has lost a third of its factory jobs — it now has about 1.3 million, according to the Bureau of Labor Statistics — compared to a 28% drop nationally.

The Smithfield plant is an icon of California’s industrial golden age. In 1931, Barney and Francis Clougherty, brothers who grew up in Los Angeles and sons of Irish immigrants, started a meatpacking business that quickly took hold in Vernon. Their company, later known as Farmer John, became a household name in Southern California, credited with producing the beloved Dodger Dog et al pastor that sizzled at backyard barbecues. During World War II, the company supplied rations to American troops in the Pacific.

Nearly 20 years later, Les Grimes, a Hollywood set painter, was commissioned to create a mural at the factory, transforming a bland industrial structure into a pastoral landscape where young children hunted cherub-looking pigs. . It has become a tourist destination.

More recently, he has also been a symbol of the state’s social and political turmoil.

In explaining Smithfield’s decision to close the plant, Mr. Smith, the chief executive, and other company officials pointed to a 2018 statewide ballot measure, Proposition 12, which requires that pork sold in the state come from breeding pigs housed in spaces that allow them to move more freely.

The measure is not yet applied and faces a challenge before the United States Supreme Court this autumn. If not overturned, the law will even apply to meat packaged out of state – the way Smithfield now plans to supply the local market – but company officials say that in all case, its adoption reflects an inhospitable climate for hog production in California.

Passions have sometimes run high outside the factory, with animal rights activists condemning the confinement and treatment of slaughtered pigs inside. Protesters serenaded and provided water to pigs whose snouts were sticking out of slats in oncoming trucks.

In addition to its objections to Proposition 12, Smithfield argues that the cost of utilities is nearly four times higher per head to produce pork in California than at the company’s other 45 plants across the country, although he refused to say how he got there. estimate.

John Grant, president of United Food and Commercial Workers Local 770, which represents Ms Robles and other workers at the plant, said Smithfield announced the closure just as the parties were due to begin negotiate a new contract.

“A total punch and, frankly, a shock,” said Mr Grant, who worked at the factory in the 1970s.

He said wage increases were a priority for the union which is entering negotiations. The company offered a $7,500 bonus to employees who stay through the shutdown and increased hourly pay, previously from $19.10 at the top of the scale, to $23.10. (The rate at the company’s unionized Midwest plants is even a bit higher.)

But Mr Grant said the plant’s closure was an affront to its members, who have struggled through the pandemic as essential workers. Smithfield was fined nearly $60,000 by California regulators in 2020 for failing to take adequate steps to protect workers from contracting the coronavirus.

“After all that employees have done throughout the pandemic, are they now all of a sudden going to flee? They are destroying lives,” Mr Grant said, adding that the union is working to find new jobs for workers and hopes to help find a buyer for the plant.

Karen Chapple, a professor of urban and regional planning at the University of California, Berkeley, said the shutdown was an example of “the broader deindustrialization trend” in areas like Los Angeles. “It probably doesn’t make sense to be here from an efficiency standpoint,” she said. “It’s the end of a long exodus.”

In fact, the number of jobs in the food industry in Los Angeles County has declined 6% since 2017, according to state data.

And as those jobs are cut, workers like Ms Robles are wondering what’s next.

More than 80% of the Smithfield plant employees are Latinos – a mix of immigrants and first-generation natives. Most are over 50 years old. Security and benefits have kept people in their jobs, say union leaders, but the nature of the work has made it difficult to recruit younger workers who have better alternatives.

On a recent cloudy morning, the air in Vernon was heavy with the smell of ammonia. Workers wearing surgical masks and wearing goggles and helmets entered the factory. The sound of forklifts buzzed beyond a tall fence.

Massive warehouses line the streets of the neighborhood. Some sit vacant; others wholesale local baked goods and sweets.

Ms Robles started at the Smithfield plant four years ago. For more than two decades, she owned a small business selling produce in downtown Los Angeles. She loved her job, but when her brother died in 2018, she needed money to honor his wish to have his body sent from Southern California to Colima, Mexico, their hometown. She sold the business for a few thousand dollars and then started at the factory, earning $14 an hour.

“I was proud,” she said, reminiscing about the first few months of her new job.

Mrs. Robles is the sole breadwinner for her family. Her husband has had several health complications, including a heart attack in recent months, so she is now taking on the $2,000 mortgage payment for their home in the Watts neighborhood of Los Angeles. Sometimes her 20-year-old son, who recently started working at the factory, helps with expenses.

“But it’s my responsibility – it’s up to me to provide,” she said.

Ms Robles has long said the Lord’s Prayer every night before bed, and now she often finds herself repeating it throughout the day to strengthen herself.

“They kick us out with no response,” she said.

Other workers, like 67-year-old Mario Melendez, who has worked at the plant for a decade, share this sense of disconnect.

It’s an honor to know that his work helps feed the people of Southern California, he said, especially during the holidays, when the factory’s ribs, ham and hot dogs will be part of the popular celebrations.

But the factory is also a place where he contracted the coronavirus, which he transmitted to his brother, who died of the virus, just like his mother. He was devastated.

“A terrible shock,” said Mr. Melendez, who says he feels betrayed by the company.

Just like Leo Velasquez.

He started the night shift in 1990, earning $7 an hour wrapping and sealing bacon. A few years later, he switched to the day, working 10-hour shifts.

“I gave my life to this place,” said Mr. Velasquez, 62.

Over the years, his body began to wear down. In 2014, he underwent shoulder replacement surgery. Still, he had hoped to continue at the factory until he was ready to retire.

“That’s not going to happen,” he said. “Where I go from here, I don’t know.”

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