Parks Sausage Co., the largest black-owned manufacturing business in Baltimore, ceased operations yesterday amid a sea of financial troubles and threw into doubt the future of 219 workers.
Shortly before noon in the company cafeteria, Chairman Raymond V. Haysbert Sr., 76, a 44-year Parks veteran, told workers the company no longer could afford raw materials and salaries that average about $480 a week.
The shutdown raised questions about whether a deal to sell Parks to a group led by former Pittsburgh Steelers star Franco Harris would go through.
After sending home all but a skeleton crew of employees "indefinitely," Haysbert said he was worried about the message of closing Parks, a symbol of the ability of African-American-owned companies to compete.
"It's a gut-wrenching thing," he said. "Not only for me but for other people who will say, 'Wow, have you heard?' "
But while workers emptied their lockers, in Pittsburgh Harris was saying he still planned on "finishing up the deal" to buy Parks.
"Unfortunately, they weren't able to hold on," said Harris, majority owner of Super Bakery Inc. in Pittsburgh. "We have basically come to an agreement. Now it's up to the lawyers to draft."
Haysbert said he had no expectations about what he described as the "pending" deal. Appearing frustrated, he said the group led by Harris is supposed to visit Wednesday.
"What does coming in Wednesday mean?" he said. "I'm cynical. I've tried this thing for 10 months. Promises, promises."
But Mark Friedman, Parks' lawyer, said he thought a decision had been made by Harris to buy the company.
"I think there's substantial reason for optimism that this company is going to be salvaged and remain in Baltimore," he said.
Yesterday's layoffs came after Haysbert struggled for 10 months to find a buyer for the Baltimore company, which he said is about $7 million in debt. Negotiations with one group lasted about six months before collapsing.
The company has talked to a partnership that includes Harris and his college teammate Lydell Mitchell, a former Baltimore Colts player, for about three months.
Workers said yesterday they were not surprised by Haysbert's announcement. The company's financial troubles have become apparent over the past few weeks, as poor credit and a cash shortage stopped the flow of materials.
"For the last two weeks, we've had almost no work to do," said Lue Palmer, who has worked at Parks for half of her 60 years. A "scaler" who weighed sausage before it's packaged, Palmer said she might have to work 1 1/2 jobs to match her salary at Parks.
"I'll find something," she said.
Founded in 1951 by Henry Parks in an abandoned dairy plant near the junction of Pennsylvania and North avenues, the company later moved to Camden Yards. It built its present facility to make room for Oriole Park.
The new plant proved too big for Parks' volume. It lost two big customers between 1993 and 1995: Pizza Hut and Domino's Pizza. Annual sales fell from $28 million in 1990 to $20.5 million in the fiscal year that ended last June.
Parks' $16 million plant in the Park Circle enterprise zone, built in 1990, pays about $10 an hour to production workers. Haysbert said the average salary is about $25,000 -- much more than most jobs in the neighborhood near Druid Hill Park.
Last August, Haysbert agreed to sell Parks to a group headed by W. Kevin Wright, former general counsel to TLC Beatrice, and Anthony S. Fugett, a Baltimorean and Beatrice board member.
Beatrice, an international food concern, is the nation's biggest black-owned business.
The deal was supposed to close by Sept. 30. The deadline was extended to Oct. 31, and again to Jan. 20, Haysbert said, before the deal collapsed.
For any buyer, Parks' balance sheet will be a key issue. Besides the $2.8 million owed to the city for economic development loans, it owes about $5 million to NationsBank and substantial -- but undisclosed -- sums to suppliers.
Baltimore Development Corp., the city's quasi-governmental economic agency, has extended Parks a $400,000 short-term line of credit, which is included in the money owed to the city. The loan was guaranteed by Haysbert and his son, Reginald.
BDC and city officials did not return calls seeking comment yesterday.
Haysbert said yesterday that he had spent hundreds of thousands of dollars in legal fees in an attempt to find a buyer.
Haysbert said the company suffered because of its oversized plant and a tough industry increasingly dominated by giants like Smithfield Foods of Virginia.
"My primary consideration now is the 219 jobs," he said. "We have to look at all of our options, including Chapter 11," filing for bankruptcy protection.
Times have been particularly tough for the company this year, he said. "We've been operating on a c.o.d. basis since January."
The company laid off about 40 workers on May 17 and the sent all but about 10 home yesterday. Haysbert, pictured on the cover of several magazines for his business prowess, said he had seen the company through some "glorious times."
He reminisced about the universal appeal of the slogan, "More Parks Sausages Mom Please." He said companies were willing to pay up to $10 million for the Parks name, but that selling only the label would signal surrender.
Troy Givens, 26, who has worked at the plant for seven years as a "floor man" assigned to keep materials moving, said rumors of the company's troubles were rampant. He also said Haysbert told workers that the company lacked credit even to buy a car.
"I'm not that worried," he said. "I'm more worried for the older people who have been here all these years."
Pub Date: 5/25/96
