Volume 26, Number 4

Plant Closures Present Opportunity
To Build 21st-Century Economy

Fred Schepartz

This fall, right here in Madison, Wisconsin we received the sad and shocking news of the closing of the Oscar Mayer plant, which will result in the loss of more than 1000 union jobs.

And then a few weeks later in neighboring Jefferson County came the announcement that the Tyson plant would close, costing more than 400 union jobs.

Oscar Mayer had been in Madison since 1919 when it purchased the Farmers’ Co-operative Packing Co. The Tyson facility is even older, dating back to 1875.

Yes, this is all too common a story. What happened in south-central Wisconsin has been happening all over the country. How it happened here is pretty much how it happens everywhere.

It’s the standard operating bullshit of the corporate and high-finance game that has no allegiance to the communities that give so much to make these businesses successful.

At Tyson, it’s reorganization and downsizing as a means to increase return to shareholders. In the case of Oscar Mayer, the handwriting had been on the wall since Heinz bought Kraft, which had owned Oscar Mayer since the 1980s. With that merger it was fairly clear that something like this was going to happen, and sure enough, it did.

The geniuses at Heinz deemed the Madison Oscar Mayer plant old and outdated. Instead they opted to build a brand-new plant in Davenport, Iowa, which could utilize state-of-the-art automation. Of course Heinz got a sweetheart of a deal to build a new plant even though the automation will result in a net loss of jobs. And people are raising a big stink about this because of all the public money going to Heinz.

It should be noted that there has been a slow but steady decline at Oscar Mayer since it ceased to be its own owner. At its peak in the 1970s, Oscar Mayer employed 4000 people, four times today’s number. Since General Foods bought out Oscar Mayer in 1981, the Madison company has been a bottom in the game of merger/acquisition, resulting in downsizing and wage cuts as whichever corporation demanded take-backs during contract negotiations with the workers’ union.

It should further be noted that the union hall for the United Food and Commercial Workers local is actually on company property. That is because Oscar Mayer traditionally enjoyed cordial relations with the unions that represented its workers.

The departure of Oscar Mayer leaves a huge hole in the community. Obviously, we’re talking jobs, generations of jobs.

But also, Oscar Mayer was a great civic partner, donating tons of money to local charities every year. This is not something that is easily replaced.

Capital abandonment is a tragedy. However, I believe it is hugely important to view capital abandonment as a challenge, and perhaps even an opportunity to replace the old business with something new, something locally owned and sustainable, something that serves the community, something of the community, by the community and for the community.

Cooperatives are the answer: here in Madison, over in Jefferson, and anywhere in the country.

The first step is for the community to say that it owns Oscar Mayer, not Heinz. We, as a community, invested in this facility for nearly 100 years. Generations of workers gave their heart and soul to make this business a success. The City has provided infrastructure worth who knows how much and did so happily. Did Heinz pay a dime for roads, for water, for electricity?

Heinz won Oscar Mayer in a high-finance poker game earlier this year.

Sorry, Heinz. Your rights to this facility are limited.

Allegedly, Heinz is attempting to find a buyer for the abandoned facility. If this works, great. There are numerous success stories in other cities where abandoned food-processing facilities were purchased by up-and-coming food-processing companies.

If Heinz does not find a buyer or at least make a good-faith effort to find a buyer, the City of Madison must step in and take ownership either by buying the facility or claiming eminent domain if Heinz is not willing to sell for a very fair price.

The next step is for the Oscar Mayer workers to form a worker’s cooperative. They could harness their knowledge, experience and expertise in food processing and transform the facility to a model business for the 21st-century economy.

And certainly the support is out there, if the Oscar Mayer workers choose to move in this direction. The City of Madison has several million dollars allocated for the next five years to invest in cooperatives. Oscar Mayer would be a good place to spend some of that money. The State of Wisconsin should step up to the plate as well. And the Madison area is home to many successful cooperatives. Certainly there are many resources available to advise and support newly formed cooperatives.

The facility could perhaps facilitate an intersection of various types of cooperatives. Remember, before Oscar Mayer, the plant was called Farmers’ Co-operative Packing Co.

Perhaps the solution is to go back, back to the future.

Organic livestock farming is a growing industry. Organic livestock farmers could form producer cooperatives to increase their scale. The worker’s cooperative at Oscar Mayer could butcher, process and package the meat (though slaughtering would have to be done elsewhere; Oscar Mayer ceased slaughtering in the 1970s).

This scenario could solve a problem for Black Earth Meats based in Black Earth Wisconsin. The company was on the cusp of becoming a major player in terms of the slaughtering, butchering and processing of organic meat in the region. However Black Earth Meats grew too fast and ran afoul of the town of Black Earth. Legal action is pending, and Black Earth Meats is without a base of operation, and thus is on hiatus.

If Black Earth Meats could find a place to slaughter livestock, Oscar Mayer would be a logical place to process and package the meat, allowing the company to grow as it should have.

That's one idea. There are many others.

In the wake of the news about Oscar Mayer, the City is accelerating a process to open a public market, which would serve as a conduit for locally sourced food.

The cooperative could be part of the public market. Perhaps vendors at the public market could use space at Oscar Mayer for production. Vendors could form smaller worker cooperatives. Or vendors could contract with the cooperative for production if the scale is big enough.

A mere stone's throw from Oscar Mayer is an outfit called Feed Kitchen, which serves as incubator space for fledgling food processing businesses. The facility has been very successful thus far and has played a crucial role in facilitating the birth and growth of these ventures.

Oscar Meyer could serve as an expanded version of Feed Kitchen. And with the upcoming public market this facility would have an excellent outlet for their products.

Another possibility is that Oscar Mayer could venture further into the realm of non meat products. After all, the workers at Oscar Mayer already have experience in this area. Kraft purchased Boca Brand a few years ago, and Oscar Mayer—Madison has been producing Boca Burgers for awhile.

This could work in a few ways. Well-established brands looking to expand production could contract with the cooperative at Oscar Mayer.

Fledgling brands could perhaps do the same.

Or fledgling brands could move to Madison and form their own worker cooperative within Oscar Mayer.

There are many, many possibilities, many means to achieve this end. In the wake of capital abandonment, we don’t have to simply throw up our hands in resignation. We can take an assertive step forward to form something new, something locally owned and sustainable, something of the community, by the community and for the community.

We can build a 21st-century economy that truly serves the community, but we as a community must find a way to do it ourselves. Otherwise it won’t get done.