Swift & Co. is still reeling from the federal government's immigration raids in December. The incident involved six packing plants and more than 1,200 employees and is having a lasting effect on the company's finances.
Swift officials pointed to the company's waning third-quarter beef sales as a result. Earnings for the company's third quarter came in a negative $9 million, which is much improved from the $30-million lost for the same time a year earlier. Word is that the company would have been in the black had the raids not occurred.
While Swift's beef sales declined 15.8 percent in the three months ended Feb. 25, the company's pork sales rose 2.9 percent.
Four months after the raids, Swift is "well on its way to recovery, with pork production returning to pre-raid levels in March and beef production expected to do the same by summer," says Sam Rovit, Swift's president and chief executive officer.
The one-time estimate of the raids included $20 million, mostly for lost efficiency, as well as $10 million to retain current workers and hire more.
The costly issue is not just about hiring employees, but training them and getting them up to speed. To beef side requires more complex tasks says Rovit, which is why the costs are higher.
"Cattle supply is not an issue, and capital is not an issue," he says. "It's a people issue, but we're working through it and we're comfortable with where we are (in that process)."
Meanwhile, several major meat firms are looking at the prospect of buying some or all of Swift's assets.
"No one likes uncertainty, but we've been able to keep plowing ahead and we're comfortable with where we are," says Rovit. "We have no problems with customers; we're not losing a lot of people in corporate offices; and things are fine at the plants. It's not something people wish on themselves, but I think we're managing well."
A couple of additional take-home points in the Swift example: 1) Immigrant workers are an important facet of doing business today — especially for agriculture and the food industries; 2) trained workers are a valuable asset in short supply that cost a lot to replace — more than you might expect.