News Column

BPI To Close Waterloo Plant, Two Others, Cutting 650 Jobs

May 8, 2012

John Molseed

Citing waning demand and public confidence in lean beef product, Beef Products Inc. announced Monday it is shutting down production at the Waterloo plant eliminating about 220 jobs as of May 26.

Production at the Waterloo BPI plant was suspended March 26 after a publicity campaign labeling the company's finely textured beef product as "pink slime" hurt demand for the meat product. The company continued to pay the workers there, and said it hoped to reopen the plants if demand for the product rebounded.

In a statement released Monday, BPI spokesman Rich Jochum announced the Waterloo plant and plants in Amarillo, Texas, and Garden City, Kan. will close. About 220 people are employed at each of the plants.

"While we had hoped to be able to resume operation at those plants, that is not going to be possible in the immediate future and the temporary suspension of operations will in fact result in the elimination of those jobs effective May 25," Jochum wrote.

Plant employees in Waterloo said they knew few official details about the company's decision but had been scheduled to speak to company officials Tuesday. The only remaining BPI plant producing the finely textured beef product in South Sioux City will continue production at a reduced level.

"Obviously, any time a facility closes, it's going to have some impact on our economy but also on the people who had worked at BPI, and our first priority is going to be to work with BPI and our partners at Iowa Workforce Development and Hawkeye Community College to start finding new employment for the people who formerly had been with BPI," said Steve Dust, CEO of the Greater Cedar Valley Alliance & Chamber. "It also goes to show something that has a devastating economic impact that had nothing to do with their business and product."

Don Hatland, of Cedar Falls, a systems engineer at the Waterloo plant, said he would continue to stand by BPI and its finely textured beef product. He and other BPI employees used social media to respond to the "pink slime" campaign.

Social media frenzy and stories about "pink slime" -- which often had inaccurate information and incorrectly showed mechanically separated chicken, not beef -- caused a consumer backlash that cut demand for the product.

"I don't think anybody's intention was to put people out of work or drive hamburger prices higher," Hatland said. "It was kind of like the butterfly effect."

The BPI publicity campaign has been effective, Hatland said, but added it is slow.

"I think it's one of those things that's going to take time," he said. "Pink slime is catchy, easy to remember."

Jochum also cited those efforts in his statement.

"We will continue communicating the benefits of BPI's lean beef, but that process is much more difficult than the campaign to spread misinformation that brought us to this point," Jochum wrote.

The lean finely textured beef is made from beef steak and roast trimmings. It can't be cut manually from the bone and extracted using heat and a centrifuge and is treated with ammonia hydroxide to kill bacteria.

The product is, on average, 95 percent lean beef and is mixed with ground beef and in other products including low-fat hot dogs.

Gov. Terry Branstad, who also led a social media blitz supporting BPI, issued a statement about the closing calling the "pink slime" stories a "smear campaign" that will take "years to correct."

In his statement, Branstad promised his office would help the employees affected by the closure.

"This is a sad day for the state of Iowa," Branstad wrote. "The fact that a false, misleading smear campaign can destroy a company's reputation overnight should disturb us all."



Source: (c)2012 Waterloo-Cedar Falls Courier (Waterloo, Iowa)


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