Beset by Regulatory Problems in U.S., Tyson Foods Eyes Market in China
No one has ever accused Tyson Foods of being green.
Even as the Springdale, Ark.-based meat giant's probation ends for 20 federal violations of the Clean Water Act at its Sedalia, Mo., chicken plant in 2003 -- it paid a $7.7 million fine -- it is back in court.
In an unfolding trial in Tulsa, Okla., Tyson is accused by the state of Oklahoma, along with Cargill Inc. and a dozen other poultry companies, of violating state and federal laws limiting the disposal of animal waste in the Illinois River watershed.
Tyson and the other accused companies treat Oklahoma's rivers, "like open sewers," says State Attorney General Drew Edmondson, dumping into the watershed in one year the amount of phosphorous that would be generated by 10.7 million people.
But Tyson has more troubles than being on the wrong side of the Clean Water Act.
In July, it was fined $339,500 by the U.S. Department of Labor's Occupational Safety and Health Administration for "serious, willful, repeat, and other-than-serious violations of safety and health standards" at its Noel, Mo., plant.
In January, it settled a financial wrongdoing suit brought by Tyson shareholders and Amalgamated Bank that charged it with spring-loading options -- a maneuver similar to backdating -- for $4.5 million.
And then there's production.
Tyson had planned to capitalize on the $13 billion natural foods market, oxymoron aside, by marketing chicken "raised without antibiotics" and even launched its website and PR machinery.
But the Department of Agriculture ruled the ionophores Tyson uses in chicken production are antibiotics, over Tyson protests that ionophores don't cause human antibiotic resistance, and the venture went nowhere.
This year it announced the closure of a 400-person Wilkesboro, N.C., chicken plant -- "Growing consumer demand for ready-to-eat foods" has edged out "refrigerated, oven-roasted chicken," it says -- and the end of slaughter operations at its 1,700-person Emporia, Kan., beef plant. Two years ago it shuttered slaughter plants in Boise, Idaho, and West Point, Neb.
Of course, it is no secret that it's hard to find legal workers for meat plant jobs.
But in 2001, a federal grand jury charged Tyson with actually operating an elaborate illegal worker smuggling scheme -- paying undercover agents for delivery of workers to Tyson plants across the country and providing them with fake Social Security and other identification cards. Tyson even paid smugglers who helped aliens across the Rio Grande with corporate checks, according to the 57-page indictment.
But Tyson was found not guilty.
Nor did charges brought by employees Birda Trollinger, Robert Martinez, Tabetha Edding and Doris Jewell -- that Tyson violated the Racketeer Influenced and Corrupt Organizations Act by knowingly hiring illegal immigrants who were willing to work for wages below those acceptable to Americans -- stick the following year.
"This is a company with a bad history," the Rev. Jim Lewis, an Episcopal minister in Arkansas, told the New York Times. "They cheat these workers out of pay and benefits, and then try to keep them quiet by threatening to send them back to Mexico."
Of course, there's something worse than illegal employees: undercover ones.
In December 2004 and February 2005, an undercover investigator with People for the Ethical Treatment of Animals (PETA) gained employment at Tyson's Heflin, Ala., chicken plant and videotaped workers ripping off chickens' heads manually, malfunctioning throat-cutting machines that mutilated birds, and a plant manager saying it was acceptable if up to 40 birds per shift were scalded alive.
Two years later undercover employees at Tyson's Cumming, Ga., and Union City, Tenn., plants documented additional atrocities and workers urinating in the live-hang area.
Tyson responded by firing several workers at the Cumming and Union City plants -- it wouldn't say how many or if any were managers -- and disciplining and retraining others in animal welfare.
But the 2003 disclosures of its own employee, Virgil Butler, who worked at its Grannis, Alaska, plant for five years suggest a pattern of abuse. Butler described birds scalded alive, left to freeze to death and exploded with dry ice by employees for their amusement.
Some say Tyson's "Teflon" conviction history bespeaks friends in high places.
Who can forget the charges that it bribed agriculture secretary Mike Espy with gifts to influence legislation in 1997 leading to his disgraced resignation? Tyson paid $6 million to settle the accusations, but the two convicted Tyson executives facing prison time were pardoned by Clinton.
But Tyson officials see it differently.
"If we've got all this political power, how come the government keeps doing this to us?" asked former chief marketing officer Bob Corscadden.
Now Tyson is capitalizing on unmet demand for chicken in China by opening Jiangsu Tyson Foods in Haiman City, near Shanghai, which will produce 400,000 birds a week at first with plans to increase production to 1 million birds a week.
Richard Bond, Tyson's president and chief executive says the company intends to become, "the first producer to deliver brand-name, high-quality fresh chicken to consumers in the eastern China market."
Nor does it expect regulatory problems.