50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

U.S. Meat Giant Tyson Foods to Close Key Chicken Facilities Amid Cost-Cutting Measures

Published 08/07/2023, 06:49 PM
Updated 08/07/2023, 07:00 PM
© Reuters.  U.S. Meat Giant Tyson Foods to Close Key Chicken Facilities Amid Cost-Cutting Measures
TSN
-

Tyson Foods ( NYSE:TSN ), a major player in the U.S. meat industry, has announced its plan to shut down four chicken plants in Arkansas, Indiana, and Missouri. This decision is aimed at reducing costs and comes on the heels of previous closures in Arkansas and Virginia earlier this year. These closures, which account for around 10% of Tyson's chicken-slaughter capacity, have come as a shock to local officials, especially given the long-standing presence of these facilities in their communities for over 50 years.

The company intends to shift operations from the soon-to-be-closed plants to newer establishments located closer to its customer base. This transition is slated to occur between late 2023 and early 2024. Tyson's move affects several small towns heavily reliant on the company for employment. For instance, in Noel, Missouri, the plant employs about 1,500 of its 2,100 residents, highlighting the significant economic blow such closures represent.

Besides direct employment, these closures will have a ripple effect on the local economies. Dexter's plans for an $18 million wastewater treatment plant are now on hold due to the impending shutdown. Furthermore, the closures impact local farmers who supply chicken houses and those producing chicken feed. Although Tyson has refrained from disclosing the exact number of affected employees, they have offered assistance in relocation and encouraged the workforce to seek other positions within the company.

Tyson's CFO, John R. Tyson, expressed the difficulty of such decisions but emphasized the necessity for the company's long-term efficiency and growth. CEO Donnie King pointed out that the targeted plants for closure were typically smaller and would require considerable capital investment to remain operational. While local officials and communities grapple with the ramifications of these decisions, they are gearing up to find alternative solutions for the affected workforce.

This article was originally published on Quiver Quantitative

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.