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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.
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.]