FORT WORTH, TEXAS — Pilgrim's Pride decided to end contracts with some Florida chicken growers before filing for bankruptcy late last year based on production factors — not race, a company official testified March 10 at a hearing, according to The Associated Press.
Pilgrim's Pride decided to cut shifts at its Live Oak, Fla., plant, which was losing $1 million a week. This resulted in canceling contracts with about one-fifth of its growers, said Randy Stroud, the company's senior vice-president of live technical services.
Although some farmers who are Hispanic or had formed unions have alleged discrimination and are fighting the terminations, Mr. Stroud said neither their races nor their activities were considered. He added growers were ranked based on a complex system used to determine their efficiency in the past year, which is an industry standard. About two-dozen growers were cut.
Pilgrim's Pride didn't offer to pay the growers to stop producing as it did when it closed its Siler City, N.C., plant last spring — a move that cost the company $3.9 million, Mr. Stroud said.
"In Live Oak, at that time we were in bankruptcy, and that (payment offer) really wasn't an option," Mr. Stroud testified at the hearing before U.S. Bankruptcy Court Judge Dennis M. Lynn.
Don Jackson, Pilgrim’s Pride chief executive officer, also testified that the process of choosing the 26 growers was fair and terminating the contracts necessary and the best option. Slowing or stopping operations at Pilgrim's Pride plants is expected to save the company $250 million this year, he added.
Mr. Stroud said he did not know of any investigation into why many growers whose contracts were canceled had the same field representative, when questioned by Deborah Deitsch-Perez, an attorney representing the growers. But he said that person had no input into the decision.
Some growers are expected to testify when the hearing resumes on March 13.
Before the five-hour hearing, the judge approved the company's employment agreement with Jerry D. Wilson as executive vice-president of sales and marketing. He will earn $500,000 a year and get an additional $500,000 signing bonus.
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