When Franco Harris bought Parks Sausage Co., the former football star said it would be tough to turn around the 46-year-old Baltimore company.
Six months after the purchase, it turns out he was right.
Two weeks ago, Parks lost a contract to make frankfurters for an Eastern Shore company, laid off 32 workers -- about one-third the work force -- and said it was having a new line of products manufactured not at its plant but by Jimmy Dean, a subsidiary of Chicago-based Sara Lee Corp.
"We're still losing money," Harris said. "I know we'll make it through this. But if it's business as usual, it just won't work."
Under Harris, Parks got a new management team, about $4 million in debt forgiveness and a burst of national publicity.
But all that hasn't solved the problems that forced the previous owners to close the company last May: too much plant space and too little business.
Harris, the majority owner of Pittsburgh-based Super Bakery Inc., which markets vitamin-packed doughnuts, bought Parks on Sept. 10 for $1.7 million. Parks benefited from intense civic interest in retaining the company as a minority-owned business.
The city of Baltimore agreed to take $500,000 out of the company's profits over 10 years to satisfy a $2.4 million debt. NationsBank forgave $2.4 million of a $5.4 million obligation.
The Baltimore Development Corp., the city's economic development agency, converted a $450,000 debt to a $400,000, 10-year-loan.
At the time, Harris said he would try to reclaim Parks' retail business and use contacts from Super Bakery to get new institutional customers. So far, Parks has worked mainly on the first goal, with limited success.
Harris did not rehire the roughly 80 workers responsible for sales and distribution along the Northeast Corridor. He chose to use distributors to do their jobs.
"It's been hard to get distribution into some of the smaller urban stores that Parks has been involved with" -- a situation that's improving, Harris said last week.
Some observers say Parks products have been only mildly successful. Jeff Metzger, publisher of Columbia-based Food World, said he's heard little from Parks after an initial burst of publicity. "They've been eerily silent," he said.
Kurt Funderburg, a food industry analyst for Ferris Baker Watts, said Giant Food, the region's largest grocery chain, is not carrying the entire Parks line in all of its stores.
Giant stores are authorized to carry 10 different Parks items, said Giant spokesman Barry Scher. But that doesn't mean all Giant stores are carrying all Parks products.
"As far as sales of their products, they're doing fair," Scher said. "The only reason it's just fair is that Parks hasn't done any advertising. They need to develop a formal marketing plan. We're a local company and they're a local company. We want to partner with them."
Parks' name, made famous by the slogan, "More Parks Sausages Mom, please," is one of its most valuable assets.
But buying advertising might be tough for Parks. The company, which would not disclose financial details, faces not only industry challenges but demands from vendors for cash up front.
To control costs, the company is paying Ralph and Paul Adams Inc., or RAPA, a Bridgeville, Del., subsidiary of Jones Dairy Farm, to make its scrapple.
Harris said subcontracting makes sense because it's cheaper, especially given the small volumes made by Parks. "They're doing this 24 hours, seven days a week. We have a big plant," he said. "We can't be doing a little bit of that or a little bit of this."
At its plants, Parks is producing sausage bags, links, "brown and serve" sausages and chitterlings.
Parks chose Jimmy Dean to make a new line of products named for founder Henry G. Parks Jr. because Dean's plants are capable of a manufacturing process that will give the products a longer shelf life. "We can't do the process, but we wanted to utilize the process."
Parks wouldn't disclose the location of the Jimmy Dean plants. Sara Lee officials would only confirm that Jimmy Dean is making some Parks products.
Bruce Drasal, executive vice president of United Food and Commercial Workers Local 27, last week said the union had requested a meeting with Parks management to discuss contracts with outside firms.
"Obviously, our concerns are that we want the work to stay in Baltimore," he said. "We want our people to do the work."
Harris said the contracts with RAPA haven't cost local jobs. Parks has not made its own scrapple since he's owned the company. He also said the company "outsourced" many products under the previous owner, Raymond Haysbert, including luncheon meats.
Harris said the Henry G. Parks line was an addition, not a substitute for products made in the Baltimore plant.
Other processors have moved from manufacturing their own products to marketing them and producing them elsewhere, said Funderburg, the Ferris Baker analyst.