Audio: A New Beginning For A Glatt Kosher Meatpacker

In 2008, federal agents walked into a kosher meatpacking plant in Iowa and walked out with almost 400 people. At the time it was the biggest immigration raid in U.S. history. For the tiny town of Postville and its main employer, it was devastating. Now, the plant is trying to get back on its feet.

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Marketplace On Agri-Star 8-12-10

A new beginning for meatpacking plant
Agriprocessors became Agri Star after bankruptcy

Marketplace • American Public Media

In 2008, federal agents walked into a kosher meatpacking plant in Iowa and walked out with almost 400 people. At the time it was the biggest immigration raid in U.S. history. For the tiny town of Postville and its main employer, it was devastating. Now, the plant is trying to get back on its feet. Jeff Horwich reports:

Tess Vigeland: The meatpacking business is one of the most famous, or more accurately, notorious employers of illegal immigrants. One morning in 2008, federal agents walked into a kosher meatpacking plant in northeast Iowa. A few hours later, they walked out with almost 400 people. At the time, it was the biggest immigration raid in U.S. history. For the tiny town of Postville and its main employer, it was devastating. Now, two years later, the plant is getting back on its feet, trying to operate on the up-and-up.

Jeff Horwich reports on how the company moved on without the workers that traditionally power its industry.

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Jeff Horwich: When the Agriprocessors plant first went on the block -- in bankruptcy -- nobody seemed to want it. The country's number one name in kosher meat had become a pariah with customers. Maybe worse: It was cut off from the cheap, hardworking labor the whole place was built on.

Then, a year ago, one lone bidder flew in from Canada and bought the plant for a steal.

Hershey Friedman: A company that's running has no challenges. I love a challenge.

Hershey Friedman is a turnaround specialist. He's snapped up packaging, printing and computer businesses around the world. And he's an Orthodox Jew, which is why he felt a particular mission to make Postville work.

Friedman: Slowly, slowly we're progressing and getting there. This is a humongous facility.

Friedman changed the name: Agriprocessors became Agri Star. He spent $10 million -- that's more than his purchase price -- just to rebuild the beef line. All that's pretty straightforward. Staffing the place? Not so much.

Friedman: Unfortunately, the city of Postville is full of illegals. I know that, as a fact. And you just have to be double, double careful.

Workers caught in the 2008 raid were deported. But many of their families, and workers who weren't caught, stayed in the area. They want work. But Friedman says Agri Star is "100 percent under the microscope," which makes it an experiment worth watching: Can you run a packing plant in rural America on only legal labor?

Friedman: You can do it. It's a big job, but you have to do it, OK? Look at it this way: You don't have a choice.

Somali men talking

After the evening shift change at Agri Star, Somali men fill a small park down the street. Almost all moved to Postville from Minneapolis, four hours away.

Abdalla Omar: I heard this company's hiring people, I came and applied for it, and I start working from there.

Abdalla Omar estimates more than a third of Agri Star workers now are Somali. He works on the newly restarted beef line, and says it's getting busier.

Omar: When I started, we used to work six hours, but now usually we get eight hours a day. I started at $8.50 an hour, but now I get paid more -- I got a raise.

Before the raid, many undocumented workers made minimum wage. Today, jobs at Agri Star start at two dollars above it. These Somalis say the plant is a safe place to work -- high praise in the meatpacking world. But luring and keeping good workers is not easy. The owner, Friedman, says turnover is going down -- that there's enough legal labor in town.

Workers like Derek Cobbins see it differently.

Derek Cobbins: They go through a lot of workers, I'll just say that, you know? A lot of workers.

Cobbins is one of a handful of native-born Americans working on the floor. He moved here from Dubuque, soon after the raid. He says the plant's hiring system still has holes -- workers with fake documents are getting through.

Cobbins: They're still putting them to work, and they know this. They only work, what, two to three weeks or months, and then they're still looking for more people.

Horwich: Is that because they find out that they're illegal and they have to get rid of them?

Cobbins: Yeah, yeah.

Each worker found out means weeks of training down the drain. Stepped up drug testing nixes other workers. And many in town worry whether the new arrivals have the work ethic for often brutal meatpacking jobs. There's a palpable nostalgia for the days when Postville teemed with dependable, undocumented workers -- Guatemalans, in particular.

Dean Ohloff: Yes, they were illegal. But they were good people.

Dean Ohloff sits on his front steps, a half-block off the main drag. He's active in Postville civic life, and works for a feed company nearby.

Ohloff: They were family-oriented, they were hard workers, you could depend on them. They were there every day.

Ohloff and others are frustrated their town and their plant are hamstrung -- that Agri Star can't just hire the immigrants willing to get the job done. Right now, Agri Star is losing money. The owner, Friedman, says it will be for some time. Ohloff is rooting for him.

Ohloff: Sometimes in a small community, you're looking for things to be proud of. You know, we're looking for that happy ending, we're looking for something positive to come back out of this.

The hope now -- far-fetched, maybe -- is that Postville might be known for something else: As the packing plant town that came back from near death and did it legit.

In Postville, Iowa, I'm Jeff Horwich for Marketplace.

According to experts I've spoken with, he median starting wage in area meatpacking plants is about $11 per hour. Agri-Star is paying just under $8 per hour starting. Agriprocessors under the Rubashkin family paid minimum wage – or, in some cases, less.

So far, operating at far smaller capacity than Agriprocessors, Agri Star has been able to staff with what it claims are legal workers, almost 1/3 recent Somali immigrants from Minneapolis-St. Paul.

When production expands, staffing will become a major challenge, unless Agri-Star boosts wages (or the economy, God forbid, gets worse).

I was told last year that Agri-Star was bringing in a new ASPCA standing pen and dumping that horrible rotating pen that was so bad for animals (and not good for shochtim, either).

If that happened, then the news from Agri-Star would be, all in all, good.

[Hat Tips: The Other DK, state of the jews, neighbor girl.]

Comments

[AGRI-vated Angel]

[Unfortunately, the city of Postville is full of illegals. I know that, as a fact.]

[Right now, Agri Star is losing money.]

These two quotes should concern/enrage the citizens of Postville.

As 'they' say . . . 'same song, second verse'.

[Max Rapaport]

I do not see how these two quotes should enrage anybody.

The first, the statement the Postville is full of illegal immigrants has about as much meaning as saying that Williamsburg is full of Jews. If it is a fact, so what. Generally, the meatpacking industry hires many illegal immigrants, and given that this is a major industry in Postville, that seems to beg the obvious.

The second, statement that the company is losing money - tell me how many companies that are at the beginning of a rebuilding stage are not losing money???

It is very nice to see these changes - and it seems clear from his statements that unlike the Rubashkins, Friedman is well aware that if he plays fast and loose with the government's rules, he may end up losing his business and in prison - neither of which is good for business or the consumers of kosher meat.

[state of disgust]

Max:

Postville is not full of illegal immigrants. Undocumented aliens are not stupid. Most left the area as quickly and quietly as they could following the raid. A few found jobs on local farms and in small businesses but there are no more illegals there then there are in any other community in the United States - and perhaps less.

If Hershey friedman is using the ICE e-varification system then he is clearing job applicants appropriately. But his wage policy will make it difficult to bring in quality workers. Industry norm in Iowa is $11/hour PLUS health benefits, vacation, holidays, etc. That works out to be about $18/hour and he is nowhere near that number. That is why he has gone back to Minneapolis for Sudanese workeres.

Question: the first Sudanese workers left Postville quickly. What has changed to bring them back? Are they getting a fair shake on housing? Have they opened the Peace Grocery Store they started to establish? Have they built a mosque? If so when is the minaret going up? And what is Hershey doing about giving them time to pray during the work day?

Anyone in Postville have answers?

[Just-Wondering]

I heard that Agri Star will be closing down on October 1st unless there's a new buyer. Can anyone verify or disprove this???

[neighbor girl]

Rumor Patrol
1. Tyson Foods is buying AgriStar on
A)Sept.1
B)Oct.1
C)Nov.1(I've heard all three rumored dates)
2. Thirteen Jewish families have left Postville.
3. Leah Rubashkin and children have left Postville. Getzel is living in SMR's house.
(BTW isn't the house subject to forfeit as an asset per court ruling on bank fraud case?)
4. AgriStar is having difficulty finding truck drivers.
5. AgriStar's freezers are filled with meat. Friedman is having trouble re-entering the market.

[Just-Wondering]

First off, the number is higher than thirteen, depending on when you are talking about. If it is since the raid than there are well over thirteen that have left. That much information I can personally verify after having lived there for five and a half years myself. Also, I was under the impression that Sholom's family, including Getzel, have all left Postville. I was just wondering if any had any inside information on whether or not they will be closing down if there is no new buyer.

[TheTruthAsItIs]

I live in Postville, so I would like to add what I know......

There is every type of rumor floating around one can imagine. To address some of the following:

1. I have no way of knowing if Tyson or some other Packer/Buyer plans on buying the Plant anytime soon. We can only hope though. I am sick of hearing how Friedman is going to "save us all". He is a classical example of how it is better to be lucky than good. He has no clue how to run a beef packing plant and it is beginning to show.

2. I would have to sort of agree with Just-Wondering - since the raid more than 13 Jewish Families have left Postville. Now, if we are talking about relatively recent here I know some families have left (I have heard 8 families) but again I am not sure....

3. I don't know if Leah and children have left town. But, now that the subject has been brought up I havent seen them driving around town lately.

4. Agri Star is having trouble keeping truck drivers (through its subsidiary PrimeStar) as it is having trouble keeping many types of employees because frankly they are treated like crap and ludriculously under paid. What Friedman likes to do is get in front of a camera and boasts how he starts his production workers at a higher rate than the previous owners. What he doesnt tell people is that his administrative staff is under paid, treated poorly ( especially the female employees). Several plant staff ranging from shipping to safety to hr to a CFO ( hand picked from the owners themselves) have quit in fustration with how the place is operated. Another interesting thing to note is that the UCFW is back trying to form a union there. If Friedman thinks running the place now is a headache wait till that union gets a foothold there.

5. Agri star is having trouble selling meat. Why wouldnt it?!? Friedman kept all the Rubashkins employed there except Sholom (who wound up in jail as we all know.) Think about it. When Agriprocessors went broke, many of these mid size kosher customers hired independent rabbis to kosher their meat on a "as needed basis" If you can get your own supply of Kosher meat, why trust a company filled with many of the same members of "management" that worked for a place that faked invoices and got you dragged into court, with all your records, to some semi obscure place like Sioux Falls? Why even chance going through the headache again?!?!? Unless Friedman joins planet Earth and gets rid of the Rubashkins many of those Kosher customers wont come back ( they may not anyway)

6. State of Disgust is correct- Postville is not "full of illegals." And it was an idiotic statement for Friedman to make. Postville isnt really "full of anything or anybody" - that is part of the problem - it is still somewhat economically depressed (though, it has improved markedly from the winter of 2008)

2 years out "Agri Star" will either be owned by someone who truly wants to run a meat packing plant or it won't be running at all.