Grassley enters Tyson Foods plant fray
July 12, 2016
by Erica Shaffer
WASHINGTON – Sen. Chuck Grassley (R-Iowa) sent a letter to Tyson CEO Donnie Smith urging a resolution to the fate of a shuttered Tyson Foods Inc. plant in Cherokee, Iowa.
Community leaders in Cherokee claim that Tyson Foods is making it difficult to find a new use for the plant. Tyson Foods says it is locked in a lease for the plant until July 2020; until then the company is willing to work with the community to find a new tenant — as long as that tenant isn’t a direct competitor to Tyson Foods.
|Sen. Chuck Grassley, (R-IA)
Now, Grassley is seeking a resolution to the apparent impasse. In a letter to Smith, Grassley said in part, “I’m aware of the desire of city and county officials to see the facility occupied and operating, so that it can continue to serve the economic and employment needs of the area. It is my hope that Tyson Foods would work with the owner of the facility and local leaders in Cherokee to ensure that the facility can be occupied and productive again.”
In a statement to MEAT+POULTRY, Tyson said “We appreciate the Senator’s interest and intend to let him know we’re working with the plant’s owner and local economic development officials on ways to market the property. We hope another business can occupy it before our lease expires in 2020.
“We’ve worked with three food companies that have expressed interest in the property. Two decided it wouldn’t work for them, and one made an offer well below fair value. None of them were turned away by Tyson Foods for competitive reasons, as some have claimed.
“Even with the Cherokee closing, Tyson Foods has increased the number of Iowa residents we employ by 400 since 2014, bringing our total Iowa employment to 11,500. We’ve also invested more than $100 million to improve or expand our facilities here over the past two years,” Tyson concluded.
In September 2014, Tyson closed the plant and eliminated 450 jobs. At the time, the company said factors contributing to the plant closure included changing product needs, and the age of the Cherokee facility and the prohibitive cost of renovating the plant. Before it closed, the plant manufactured deli meats, hams, Canadian bacon and hot dogs.
Bethany Pautsch, a community relations representative from Tyson, addressed the Cherokee City Council at meeting held on May 24. According to minutes of the meeting, Pautsch explained that Tyson can determine what business can and cannot occupy the plant if the prospective company is a direct competitor of Tyson. She also said the company is willing to work with a local or national broker to locate a tenant.
Additionally, Pautsch said Tyson cannot sublease the plant without approval from the owner, Mark Langfan. She said the company was in contact with Langfan “to try to get some parameters from the landlord regarding the marketing of the property.”
As for the option of dismantling the plant, Pautsch said Tyson is contractually bound to “appropriate maintenance,” and the company is required to leave the facility in the same condition in which they found it.
One council member, Chad Brown, expressed his frustration with the situation saying, “This is detrimental to our business community. We had a prospective tenant interested in the plant and Tyson wouldn’t allow them to come in. This is hurtful to our community.”