By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
On February 21, workers at the Minnesota Beef Industries factory in Buffalo Lake, about 75 miles west of the Twin Cities, were told to punch out and go home. The roughly 125 employees of the cattle processing plant, most of them Latino immigrants, initially thought that the plant would be shut down for just one day.
A month later, however, the slaughterhouse remains dormant. In a factory where some 370 cows are normally processed daily, not one carcass has come down the line since.
The employees have been left to twist in the wind, uncertain whether their jobs will ever return. "We have more questions than we have answers," says Shane Bastian, an organizer with United Food and Commercial Workers Local 789, which represents the workers. "Our position is, we want all the workers back to work as soon as possible."
There are a number of things contributing to the slaughterhouse's hard times. The threat of mad cow disease, a dwindling dairy industry in Minnesota, and claims of questionable management practices have all been touted as potential factors in the company's economic difficulties. But whatever the primary cause, the town of Buffalo Lake, with fewer than 800 residents, faces an uncertain future if the plant doesn't reopen.
Bill Gilger, Minnesota Beef's principal owner, pins the blame for the company's fiscal difficulties primarily on U.S. trade policy. Presently U.S. companies are prohibited from importing cattle from Canada that are more than 30 months old, owing to concerns about mad cow. And Minnesota Beef exclusively processes older cattle, primarily for the kosher foods market.
"If I can't buy any cattle out of Canada, it means I have to buy them all in the United States, and that means there's a crowding-out effect," Gilger says, noting that prior to the ban in 2003 he got roughly 20 percent of his supply from Canada. "The United States did nothing to protect its meatpacking industry."
Ronald Eustice, executive director of the Minnesota Beef Council, agrees that the Canadian ban has had a negative impact on cattle processing plants. But he argues that the most significant hurdle facing operations such as the Buffalo Lake plant is the decline of dairy farming in Minnesota. The number of dairy cows in the state has steadily dropped for decades. Because there are no longer ample stocks of aged dairy cows available locally, slaughterhouses must look farther afield for animals, thus driving up costs. In 1998 there were 555,000 dairy cows in the state, according to the U.S. Department of Agriculture. By 2004 that number had dropped to 465,000. "They are going farther and farther for animals because there are fewer animals available in our own backyard," says Eustice.
Because of this somewhat perilous economic crunch, in 2004 Minnesota Beef secured $4 million in state money from the Minnesota Department of Economic Development. The 20-year loan, used to modernize and upgrade the kill floor, was supposed to ensure that the processing plant would continue operating for the considerable future. But by the time the renovation was complete, in May of last year, Gilger says his business was already stressed by the fear of mad cow disease. "Our timing was just absolutely horrific," he notes.
In addition to the nearly $4 million still owed to the state, Minnesota Beef is also in arrears to the city of Buffalo Lake for a substantial amount of cash. According to Mayor Joyce Nyhus, the town is owed more than $500,000 by the company, primarily for costs associated with a wastewater treatment facility that the plant needs to operate. "He has to find somebody with some deep pockets who sees the potential in what he has accomplished out here thus far," Nyhus says of Gilger. As of last week, she says, there were two investors who had shown interest in the plant.
Complicating matters for Minnesota Beef is the fact that earlier this month the company was sued in U.S. District Court for allegedly not properly compensating its hourly employees. The lawsuit charges that Minnesota Beef does not pay employees for the time spent putting on and removing equipment that is required to keep the workers, as well as the meat, safe. According to the civil complaint filed on behalf of hourly workers at the plant, this can add up to as much as three hours of uncompensated work per week.
In November, the U.S. Supreme Court heard a pair of cases involving workers at a beef slaughterhouse in California and a turkey processing plant in Maine. The high court ruled that companies are required to pay employees for the time dealing with safety equipment. Timothy Flemming, a Washington, D.C.-based attorney who worked on both the Maine case and the one currently pending against Minnesota Beef, says that the situations are directly analogous. "I think that the Supreme Court pretty much cleared out the area and that the ruling should be fairly easily applied," he says.
However, Gilger insists that there is zero substance to the claim and that his hourly employees have always been paid for their time spent putting on and removing safety equipment. "It's an entirely frivolous lawsuit," he says.
The uncertainty about the processing plant's future has led to widespread anxiety in Buffalo Lake. According to the Buffalo Lake Hector School District, a dozen students have dropped out of classes since December. Officials fear that an equal number of additional students will depart if the plant stays closed. "Our rural schools are really fighting to keep enrollment numbers at their highest possible," Mayor Nyhus notes, "because otherwise you've got to close the building."
Nyhus further notes that some locals fail to appreciate the positive impact that Hispanic immigrants have had on the community. "A lot of folks locally don't see the big picture," she says. "It's like, 'Well, the Hispanics came up here, now they can go back.'"