Old Esskay plant to be closed here many face layoff Owner says structural defects are to blame

October 01, 1992|By David Michael Ettlin | David Michael Ettlin,Staff Writer Staff writer Richard Irwin contributed to this article.

Baltimore's venerable Esskay meat-processing plant will be closed by the end of the year because of dangerous structural problems, the parent company announced unexpectedly yesterday.

More than 300 workers will be affected by the shutdown -- some of them receiving immediate layoff notices, said Joseph W. Luter III, chairman and chief executive officer of Smithfield Foods Inc., which acquired the old city company in 1985.

Mr. Luter said consulting engineers making studies for a planned plant expansion found "some structural weaknesses" -- problems serious enough to immediately halt operations in the section where hams are boiled, and where the first layoffs likely will occur.

"In the environment today, you have to operate under a zero-risk environment," Mr. Luter said, adding that even a "half of one-half percent chance" of an accident from structural problems is unacceptable. "We cannot take that chance today."

Employees were notified of the abrupt decision at a late-afternoon meeting, and the company issued a brief, formal statement about 5:30 p.m.

The mayor's office and government economic development officials were not informed ahead of time and learned about the closing from news reports.

Esskay -- the familiar name for the Schluderberg-Kurdle meat company -- was repeatedly threatened with closing or cutbacks in operations in the 1980s, when unionized workers agreed to salary concessions to save the plant.

Mr. Luter said profitability is not the problem now -- only safety.

"We had been marginally profitable for some time now," he said last night in a telephone interview from his home in Smithfield, Va.

He said "other options" may be explored, but that it is too soon to say whether a new plant might be constructed to replace the complex in the 3800 block of E. Baltimore St.

"All options are open at this point," Mr. Luter said. "Obviously, this was a hasty decision made in the last 24 hours.

"If we stayed in Baltimore, we would have to build a new plant and we just haven't really focused in on that at all. We just found out, received a report from the outside engineers officially today."

A new plant would take "a year, probably a year and a half, if you made the decision today to design and build it," he added.

He said the company may be able to transfer some workers to its other Maryland plant in Landover, where an expansion project was completed in recent weeks.

But he was unable to estimate the numbers of jobs that might be available there. Two years ago, the company employed 555 workers at its two plants.

Officials of the United Food and Commercial Workers Union, which represents Esskay workers, could not be reached for comment last night but planned to hold a news conference this morning.

Clinton R. Coleman, the chief spokesman for Baltimore Mayor Kurt L. Schmoke, said his office had "no advance knowledge of this -- we were not notified."

He expressed hope, however, that the city would be able to save Esskay.

"The only thing I can tell you is we always stand ready to work with companies through the Baltimore Development Corp. and the Office of Employment Development," Mr. Coleman said last night. "And of course we stand ready to work with Esskay, hopefully before any final decision is made in this matter."

In 1985, Esskay's union workers, then numbering 630, voted as they had done four years earlier to continue working under a concessions agreement to keep the financially troubled company in Baltimore and secure financing for a new plant that would ensure future stability.

Later that year, the company was purchased by Smithfield and its negotiations with Local 27 of the United Food & Commercial Workers hit a roadblock on changes in work rules that Mr. Luter said were necessary for profitable operation of the plant. He said then that its production operations would be shut down without an agreement and the plant used only as a distribution center with about 50 employees.

In February 1986, workers agreed to a contract that included compromises that both sides said they could live with -- a settlement celebrated days later with a gathering of workers, company officials and politicians on a muddy parking lot to eat Esskay's famous hot dogs and hear about possible expansion.

Yesterday's announcement came as a shock to Fred J. Lengsfeld, whose role at that celebration was to relight the plant's 30-foot-high blue and orange neon "Esskay Quality Meats" sign.

"I was watching the news on TV when I heard about the plant closing and I couldn't believe it," said Mr. Lengsfeld, who worked at Esskay for 48 years before retiring in May 1991.

He said the building appeared in good shape while he worked there and was saddened that so many people would be out of work.

"They [company, union and city officials] worked hard to preserve the place," he said. "But I guess they felt it best to close it down and move."

Bernard Berkowitz, who was president of the Baltimore Economic Development Corp. during the period of Esskay's threatened closing and is now an economics teacher at the University of Maryland Baltimore County, voiced similar regrets.

He said a great deal of work and money went into preserving Esskay, adding he hoped the 300 to 400 employees who will lose their jobs with soon find other work.

He said plans were made several years ago to modernize the building, even build a new one here, but it was never done.

"I believe the company was honest in its intent to improve the structure, but I don't know why it wasn't done to the extent that we thought itmight," Mr. Berkowitz said.

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