Grain News


Pilgrim's Pride to Idle Chicken Processing Facilities in Athens, AL and Athens, GA

Date Posted: July 24, 2009

Pittsburg, TX—Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) announced July 24 plans to idle its chicken processing plant in Athens, AL, and one of its two plants in Athens, GA, within 60-75 days as part of its continuing effort to improve capacity utilization and reduce costs.

Production from the Athens, AL, plant will be consolidated into two other Pilgrim's Pride complexes, bringing those facilities to full capacity.

The hatchery in Moulton, AL, the feed mill in Falkville, AL, and other live production operations associated with the Athens plant will continue to operate.

Approximately 640 employees who work at the Athens, AL, processing plant will be affected by the plant idling.

Pilgrim's Pride expects to be able to offer positions at other facilities to many of these employees.

The company will provide transition programs to employees who are not retained in order to assist them in securing new employment, filing for unemployment and obtaining other applicable benefits.

Production from the company's Athens, GA, plant on Oneta St. will be consolidated at the neighboring Barber St. plant as well as at several other company complexes in north Georgia, bringing those facilities to full capacity.

The live production operations, including hatcheries and feed mills, will continue to operate.

Pilgrim's Pride expects to be able to offer positions to most of the approximately 330 employees at the Oneta St. location by the time the plant is idled.

The company will provide transition programs to any employees who are not retained after the consolidation.

The company does not expect any significant reduction in the number of Pilgrim's Pride contract growers in either Athens, AL, or Athens, GA, as a direct result of idling these plants.

Most growers will be transitioned to supplying other complexes.

Since production from these two plants will be consolidated into other complexes, the idling of these two facilities will not result in any decrease in the company's overall production or in any change in product mix.

There will be no disruption in the supply of product to Pilgrim's Pride's customers. The company said it would consider restarting the two plants in the future should market conditions justify it.

"As we work to restructure Pilgrim's Pride as a market-driven company, we must continue to look for ways to reduce our costs and operate more efficiently," said Don Jackson, president and chief executive officer.

"A key component of that effort is improving our capacity utilization through plant consolidation and other operational changes.

"While the decision to idle a plant and eliminate jobs is always painful - and we regret that it is necessary - it is absolutely critical to the future of Pilgrim's Pride that we make better use of our assets.

"We are taking these actions now to protect the jobs of our 41,000 employees and 4,500 growers so that we can emerge from Chapter 11 as a stronger, more efficient company."

As previously announced, the Company filed voluntary Chapter 11 petitions on December 1, 2008.

The Chapter 11 cases are being jointly administered under case number 08-45664.

The Company's operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process.

Additional information about the restructuring is available at the Company's website www.pilgrimspride.com or via the Company's restructuring information line at 888-830-4659.

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