Owner: Postville meat plant to flourish
BY TONY LEYS • Des Moines Register
The new owner of Postville's meatpacking plant said Tuesday he intends to reclaim its status as the world's largest producer of kosher beef.
Montreal businessman Hershey Friedman bought the former Agriprocessors plant out of bankruptcy last summer and renamed it Agri Star. The business had collapsed after a huge immigration raid there in May 2008 and ensuing allegations of fraud and mistreatment of workers, many of them Guatemalans and Mexicans who were in the nation illegally.
When Friedman bought the facility, it was butchering a few chickens but had stopped producing beef. The new company has ramped the chicken line back up, and the company restarted its beef line a few weeks ago. Friedman said at a news conference in Des Moines that the plant is slaughtering 85 to 90 cattle per day now and will be slaughtering 150 per day within a month and more than 500 per day within a year. He said he hopes eventually to expand the plant to increase production to 1,000 cattle per day.
At its peak, he said, Agriprocessors was slaughtering about 700 cattle per day.
Friedman said his company is using a federally organized electronic system, called "E-Verify," to ensure that all of the company's 560 employees are in the country legally. He said wages on the beef line will be $12 to $17 per hour, which is significantly more than his predecessors paid, and he will add workers as the plant increases production.
"I am not from Iowa, and I did not grow up on a farm, but I know the importance of hard work and treating people with respect and integrity," he said.
State economic development officials last fall gave Friedman's company $600,000 in grants and forgivable loans to help pay for a $7.5 million retooling of the aged plant. The company also received tax breaks. In return, Friedman promised to create 168 jobs and retain 140 more.
The news conference at the Iowa Statehouse included Postville's mayor, state agriculture officials and a leader of the Iowa Cattlemen's Association, who said the plant's resurgence will be a boost for cattle farmers. The association estimated that northeast Iowa cattle farmers lost $24 million because cattle prices dropped in the wake of Agriprocessors' collapse. Iowa has one other large beef processing plant, in Denison.
Former employees have said the Postville plant's old owners, the Rubashkin family, often paid $6.25 an hour and routinely shorted employees on their hours.
Friedman said Tuesday that current starting pay for chicken-line workers is $8.50, which increases after workers have put in three months. Beef-line jobs pay more because they require more skill.
Friedman said the plant might never reach the peak employment levels seen under the old owners, who had more than 1,000 workers at one point. He said the plant now is significantly more mechanized, which makes each worker more productive. That lets him pay higher wages without charging significantly more for the company's products, he said.
Friedman is maintaining three of the old company's brand names, David's, Shor Habor and Aaron's Best, which is a reference to former owner Aaron Rubashkin. The new owner said the brands have wide recognition.
Friedman said several current managers worked for the old owners. Two of them, Juan Carlos Guerrero-Espinoza and Martin De La Rosa-Loera, pleaded guilty last year to charges related to harboring illegal immigrants. They both served time and are out of prison. Friedman said both men were "super managers" who deserved second chances.
He said two members of the Rubashkin family who were never charged continue to work at the plant but are no longer supervisors. One is Heshy Rubashkin, brother of former company leader Sholom Rubashkin, who faces sentencing this month after being found guilty of dozens of federal fraud crimes.
Friedman said Agri Star is the only U.S. kosher beef supplier that has its own packing plant. Competitors tend to rent space at nonkosher plants, in which they use religious methods to slaughter and butcher animals.
Rabbi Yossi Jacobson, who runs Maccabee's Deli in Des Moines, said he hasn't been able to buy much of Agri Star's beef yet, because early shipments of the meat have been in bigger lots than he can afford.
Since the demise of Agriprocessors, Jacobson has been buying most of his beef from much smaller processors. The cost of those products is significantly higher, he said.
Jacobson said Friedman probably will be able to rebuild the company's dominance.
"He will do well, because he'll have a consistency of service that people can count on," Jacobson said, shortly after serving Friedman a hot pastrami sandwich for lunch.