Workplace Massacre in Alabama: Did Endless Downsizing and Slashed Benefits Cause the Rampage?

By Mark Ames, AlterNet. Posted March 13, 2009.

In 2006, Pilgrim's Pride, then the second-largest chicken processor in the world, made a huge gamble that will seem familiar to anyone who's been following the financial crash: the company borrowed hundreds of millions of dollars, leveraging itself well beyond its means, in order to acquire a rival company and become the nation's No. 1 chicken processor, slaughtering 45 million chickens per week.

That might have given the executives a nice, big hard-on, but it also meant they would have to come up with more money to pay for all that debt. So the company did do what every post-Reagan company has done and gotten away with: They made the workforce pay for the executives' mistakes. That meant squeezing them for more work for less pay, or in Pilgrim's case, more work for no pay: In August 2007, the U.S. Department of Labor filed a lawsuit against Pilgrim's Pride accusing them of grossly undercompensating their employees. That same year, 10,000 Pilgrim's Pride employees launched a class-action lawsuit demanding compensation for their work.

And this is where McLendon comes in: In 2006, the year of the acquisition, McLendon and his mother filed lawsuits and claims against the Pilgrim's Pride plant in Enterprise, Ala., charging the company with illegally denying them pay for the time it takes for workers to get suited up for the dangerous factory lines, and the time to take the protective gear off. Pilgrim's Pride had decided to stop classifying that time at the job as "work," now that they had a bunch of Wall Street bondholders to pay off. Other lawsuits also allege that the company forced workers to work overtime but only paid them regular hourly wages. 

While all of this "cost-cutting" was ravaging thousands of workers at the bottom of Pilgrim's wage pyramid, at the very top, things were very different for chairman Lonnie "Bo" Pilgrim and his little pack of plundering wolves.

Despite the chairman's disastrous acquisition, which eventually brought the company to bankruptcy in December 2008, and despite slashing the workforce's already-low pay, Pilgrim rewarded himself handsomely for a job well done: in 2007, Bo Pilgrim paid himself $3.2 million and $2.1 million in 2008 for his work as "senior chairman" of the board. Pilgrim's Pride also paid Bo $1.01 million for a contract with another firm he owns, meaning he signed on both dotted lines of the contract -- a clear conflict of interest that is now the subject of a shareholder-fraud lawsuit.

There's more: In 2008, Bo Pilgrim directed Pilgrim's Pride to pay an egg-production facility that Bo owns $775,000 in rental fees; Bo's son, Ken Pilgrim, was paid over a half-million dollars in both 2007 and 2008 as "co-chairman" of the board; another son, Pat Pilgrim, and a daughter, Greta Pilgrim-Owens, were paid a total of over a million dollars in 2007-08 by the Pilgrim-controlled board, and little Pat Pilgrim seems to have learned a thing or two from his father, earning himself an extra half a million dollars thanks to sweet contracts between Pilgrim's Pride and his other company.

The only reason we know about all of this corporate malfeasance -- so typical in the post-Reagan economy -- is because of a shareholder lawsuit filed last year. Indeed, the trajectory of Pilgrim's wealth-plunder is a microcosm of what went on all across corporate America: first Bo Pilgrim squeezed all he could out of the workforce, and when they were squeezed dry, he fleeced his own shareholders, the unter-plutocrats, before finally crying "bankruptcy" and turning to the American government and legal system to protect him and his loot.

Thanks to the "voluntary bankruptcy," Pilgrim's Pride is in a much better position against all the lawsuits against it. In fact, it's in such a good position that the bankruptcy court even allowed Pilgrim family members to be hired back as restructuring "consultants," on company pay. And in case they were having revenue problems to pay Bo, Ken, Pat and the other vampires, the USDA handed Pilgrim's a contract worth tens of millions of dollars in January.

How did Pilgrim's pay back the taxpayers for this little bailout? If you've read the news, you'll know the answer: A few weeks later, Pilgrim's Pride announced mass layoffs at three plants, devastating those communities.

If you're wondering what the Reaganomics concept of "wealth transfer from the employee class to the plutocrat class" looks like, this is it. Multiply this story by just about every corporation out there today, and there you have America.

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Read more of Mark Ames at eXiledonline.com. He is the author of Going Postal: Rage, Murder, and Rebellion: From Reagan's Workplaces to Clinton's Columbine and Beyond.

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