More Parks Sausages move away 'Brown and Serve' product is now made in Wisconsin

Shift spurred by losses

Baltimore plant wants to focus on things 'that we do well'

January 18, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Moving for the third time in the last year to save money by manufacturing elsewhere, Parks Sausage Co. has shifted production of a key product from its Baltimore plant to Wisconsin.

Lydell Mitchell, the former Baltimore Colt who runs Baltimore-based Parks with Franco Harris, said Parks has struck a deal to have its "Brown and Serve" sausage made by Fort Atkinson, Wis.-based Jones Dairy Farm Inc.

Mitchell said the five workers previously occupied with making the product have been moved to other jobs in the Baltimore plant. "We're no different, I guess, than GM," he said, referring to General Motors Corp.

"They're doing things away from their plants because it's more efficient."

Phil Kafarakis, vice president of sales and marketing for Jones Dairy Farm, said a confidential agreement barred him from talking about the arrangement with Parks. He said the privately held 109-year-old Jones is making the product with Parks' recipe.

To be profitable, Mitchell said, Parks needs to replace small-scale manufacturing of many products in its huge Northwest Baltimore plant with large-scale manufacturing of just a few products. Parks made some products outside Baltimore long before Harris bought the company more than a year ago, he also said. "We have to really focus on the three or four things that we do well," Mitchell said.

The company, widely known by its famous slogan, "More Parks Sausages Mom, Please," had about $10 million in sales in the fiscal year that ended Aug. 31 and reported a "significant loss," Mitchell said.

Harris, the former Pittsburgh Steelers star and majority owner of Pittsburgh-based Super Bakery Inc., bought Parks out of bankruptcy in September 1996 for $1.7 million.

To help the company survive as a minority-owned business, Baltimore City agreed to take $500,000 out of the company's profits over 10 years to satisfy a $2.4 million debt.

The Baltimore Development Corp., the city's economic development agency, converted a $450,000 debt to a $400,000, 10-year-loan. NationsBank forgave $2.4 million of a $5.4 million obligation. The state agreed to guarantee $1 million of a $4.5 million loan.

Since Harris took possession of the company, vendors have continued to demand up-front cash payment.

In November, a Baltimore District Court judge ordered Parks LLC to pay $16,250 to the company's former president, Reginald Haysbert, for consulting services. With resources scarce, the company said, it chose to pay workers before Haysbert. Mitchell said Parks is on good terms with its vendors and creditors.

Parks, which once employed 130 in Baltimore and 80 salespeople along the East Coast, now has only 100 workers in Baltimore. The company uses independent distributors to deliver its products. Parks last year chose Jimmy Dean, a subsidiary of Chicago-based Sara Lee Corp., to make a new line of products named for founder Henry G. Parks Jr. Since then, Parks has stopped selling that product to focus on its existing products, Mitchell said.

Parks is also paying Ralph and Paul Adams Inc., or RAPA, a Bridgeville, Del., subsidiary of Jones Dairy Farm, to make its scrapple.

Mitchell said moving production of "Brown and Serve" sausages is not part of a plan to stop production in Baltimore and sell the label. That was the path followed by Esskay Quality Meat Co., a Baltimore concern that was bought in 1985 by Smithfield Foods, of Smithfield, Va.

"Anything is possible, but we're not looking to do that," Mitchell said.

"Brown and Serve" sausages, which arrive in stores pre-cooked, are in the middle tier of Parks' seven or eight products in terms of sales, Mitchell said. The company is producing chitterlings, small sausage links, sausage patties and bag sausage at its Baltimore plant. And Parks is about to restart production of its rope sausage, Mitchell said.

Jeff Metzger, publisher of Columbia-based Food World, a regional trade magazine, said he wasn't surprised by Parks' move. "The outsourcing is a necessity for them to stay competitive," he said.

The company faces high costs for production, advertising and shelf space. "This is a tough bill, no question about it," Metzger said.

But Metzger doubted that Parks would abandon manufacturing in Baltimore. "My guess is they need some sort of local flavor, some sort of local connection," he said.

Bruce Drasal, executive vice president of United Food and Commercial Workers Local 27, said he couldn't comment because he wasn't aware of the new agreement with Jones Dairy Farm. He said he was generally pleased with Parks' direction under Harris and Mitchell. "They're settling down and things are going well," said Drasal, whose union represents about 60 Parks workers.

It's too early to tell whether the company will turn a profit this year, Mitchell said. To give business a boost, Parks has teamed up with Tropicana Pure Premium Orange Juice for a promotional campaign.

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