Tyson Foods, Inc. said it is closing permanently its beef processing plant in Norfolk and beef slaughter plant in West Point.
Production will be shifted primarily to the company's beef complex in Dakota City, Nebraska, which is completing a new beef processing addition, the company said.
The plant closings end the jobs of approximately 365 people at West Point and 1,300 at Norfolk.
Workers at both locations will continue to be paid and receive benefits for 60 days and will be asked to report for meetings to discuss benefits, as well as continued employment at other Tyson sites.
Under the federal Worker Adjustment and Retraining Act, a company as large as Tyson is required to provide notice 60 days in advance of covered plant closings and covered mass layoffs.
Instead of notice, the company is paying the employees for 60 days.
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The last day of production at West Point will be today, and the last full day of operations at Norfolk will be Friday, Tyson said.
The company will meet with West Point employees Thursday and Friday, and with Norfolk employees Monday through Thursday, February 20 - 23.
Employees will be encouraged to consider transferring to other Tyson plants, such as beef facilities at Dakota City and Lexington, as well as Emporia, Kansas.
The company said it will offer cash relocation incentives.
The new 84,500 square foot structure at Dakota City is scheduled to begin production in March and will be capable of absorbing the work performed in Norfolk, according to Tyson.
The West Point closing will enable Tyson to make more efficient use of beef slaughter operations at Dakota City and other Tyson beef plants in the region, the company said.
"We regret the disruption the closings will cause our Team Members and these two outstanding plant communities, which both have a long history in the meatpacking industry," said John Tyson, chairman and CEO of Tyson Foods. "We've worked hard over the past year to try to keep these plants open and I appreciate everyone's efforts. However, we've concluded we can operate more efficiently by permanently consolidating operations.”
The company repeated its earlier contentions that its business continues to be affected by tight cattle supplies, an abundance of protein competition, interruptions in export market access and soft international demand.
The more efficient use of beef processing capacity, together with reduced costs from the plant closures, are estimated to generate annual pre-tax cost savings of approximately $40 million, a portion of which is estimated to be generated in the last six months of the current fiscal year, Tyson said.
The plant closings are expected to mean a charge to Tyson's second quarter earnings of approximately $46 million or $0.08 per share. This includes a non-cash charge of $36 million.
Accordingly, Tyson said it now expects fiscal 2006 earnings to range from $0.42 to $0.72 per share.
Company officials have not yet determined the future disposition of the plants and related property, Tyson said.
IBP, inc., now Tyson Fresh Meats, purchased the West Point plant in 1967 from Armour & Company. IBP bought the former BeefAmerica plant in Norfolk in 1998 and after renovation began beef processing operations in 2000. IBP was acquired by Tyson Foods in September 2001.
Tyson's remaining Nebraska operations include beef plants at Dakota City and Lexington, a pork plant at Madison, a bacon operation in Omaha and a prepared foods facility in York.
