Parks Sausage sale set to close

State official expects Dietz & Watson to take over Monday

Union goes to court

Food industry

January 30, 1999|By William Patalon III | William Patalon III,SUN STAFF

The sale of the former Parks Sausage Co. plant in Park Heights to Philadelphia-based Dietz & Watson Inc. should be consummated Monday, a state economic development official said late yesterday.

"We expect to close the deal with Dietz & Watson on Monday," said Jacqueline Lampell, spokeswoman for the Maryland Department of Business and Economic Development.

The United Food and Commercial Workers International Union, Local 27, which had represented hourly workers at the plant before production ceased a week ago, went to federal court yesterday in an effort to block the deal.

The union's goal was to get some kind of assurance that former Parks workers would get the first shot at new positions in the Dietz & Watson factory, once the new owners have the plant up and running subsequent to the completion of several months of remodeling.

Sources close to the deal said the union's court bid failed yesterday. Dietz & Watson declined to comment on the consummation of the deal. Parks officials could not be reached for comment. Neither could union leaders of the UFCW local unit.

Dietz & Watson, a $100 million company that makes high-quality delicatessen meats, wants to buy the Parks factory to better serve Maryland customers that include the Giant Food Inc. and Super Fresh Stores grocery chains. Dietz & Watson employs more than 500 workers and has been around since 1940.

The company has a very good reputation in the food industry, several analysts have said. It expects to employ at least 150 people at the former Parks facility, which had an hourly work force of perhaps 45 when it finally ceased production about a week ago.

Parks got into trouble when it had to move from its longtime location to make room for Oriole Park at Camden Yards, and built the $16 million factory in Park Heights. The debt it took on for the new building and the loss of key contracts drove the company into bankruptcy.

In September 1996, with much fanfare, Parks Sausage was rescued from bankruptcy by former Penn State University football teammates and professional football stars Franco Harris and Lydell Mitchell. Harris, who had operated the company while it was under bankruptcy protection, agreed to pay $1.7 million and assume $3.9 million of its debt. As part of the arrangement, three major creditors, including Baltimore, forgave half of $8.2 million in secured loans.

In addition to the 85 jobs it saved, the deal was important symbolically because it saved a Baltimore brand name known for its "More Parks sausages, Mom -- please!" slogan and, more significant, Parks' status as a minority-owned firm.

According to industry experts, Harris and Mitchell made most of the right moves in their attempt to transform the struggling company's fortunes. But it wasn't enough, and Harris told workers late last year that -- barring a sale -- the factory would close.

The Parks brand should survive because production of the best-selling offerings in its product line will be outsourced to other firms, Mitchell said recently.

Dietz & Watson is receiving $750,000 in state "sunny day" money that converts into a grant if the company is employing 150 people by 2001. A company official recently said the work force could be much bigger than that. It also was to receive $4 million in proceeds from the sale of state economic development bonds.

A state official said the Philadelphia company will spend $6.4 million to buy and upgrade the 133,000-square-foot factory.

Pub Date: 1/30/99

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