Last updated on 2013.07.20
Northern Beef Packers will delay paying its employees their wages this week because of financial difficulties.
Employees were told on Wednesday that their Friday paychecks would not be distributed, but it was hoped wages could be paid early next week.
Northern Beef issued the following statement by email:
"Due to ongoing delays with securing additional funding, Northern Beef Packers has notified its employees that payroll will be delayed this week. The company is making every effort to rectify the situation as quickly as possible" [Jeff Natalie-Lees, "Funding Woes Delay Beef Plant Employee Checks," Aberdeen American News, 2013.07.18].
Aberdeen Development Corporation veep Jim Barringer says he still has faith in Northern Beef Packers, but expects them to get their free-market rear in gear:
"I believe in the long run it will be up and running. They're going through difficult times right now, but there's no question it's one of the major, however potential, economic engines that we see here in Aberdeen."
At the moment, Northern Beef shouldn't expect the city to write a check to keep it going.
"In a free enterprise system, there's just so much government can do and I believe in free enterprise. But the company themselves is where the responsibility rests for getting this plant up and operational," Barringer said [Mark Roper, "Aberdeen Hopeful Northern Beef Packers Can Turn Its Money Woes Around," KSFY, 2013.07.18].
Free enterprise—ha! Northern Beef Packers exists solely because of Uncle Sam and the state of South Dakota's interference in the free market with its assistance in securing millions of dollars for NBP via the infamous EB-5 visa program:
A federal program called EB-5 has been the key component in keeping the Northern Beef Packers project moving forward, say two men who are involved in the Aberdeen beef plant.
Under the EB-5 program, residents of other countries provide capital or loans to American projects. In return, those investors receive an immigrant visa, or green card, that allows them to live permanently in the U.S....
Aberdeen attorney Rory King, who represents the Northern Beef Packers limited partnership, says EB-5 has “been the whole financing for the beef plant.”
There have been two phases, he said. In the initial phase, Dennis Hellwig and Bollen's company arranged about 70 investors, who paid $35 million total. Those investors received an equity interest, or share of ownership, in the plant.
Another group has provided about $45 million through EB-5. But, in the second phase, the $500,000 that each of those investors supplied is a loan. “They've invested in our lenders. And that's where the lender got the money to loan to us,” King said. “So basically that's where the money has come from to build the plant.
“We also have some state and federal commitments for financing, and we've got a bridge loan that's arranged to provide the working capital and so forth,” King said. “But that's what's built the plant — the EB-5 funds” [Jeff Bahr, "Green Cards Lure Beef Plant Investors," Aberdeen American News, 2012.07.02].
South Dakota state officials make a lot of trips to China to round up millions of dollars for risky business ventures that otherwise would never get off the ground. Yet even with apparently 160 foreign investors from China and elsewhere buying the tickets to America by handing their cash to Northern Beef Packers, the Aberdeen company still can't make payroll, let alone steady production. NBP has proven so shaky that some EB-5 investors even sued the state's EB-5 clearinghouse for (ahem) misrepresenting the viability of the project in its 2009 and 2010 investment pitches.
2009 and 2010... hmmm.... Political observers may wish to note that South Dakota's big reliance on EB-5 visa funds for business development got rolling under the administration of Governor M. Michael Rounds. If now-Senate candidate Rounds gets around to holding any town halls like his challenger Rick Weiland, perhaps someone can ask why his concerted meddling in the free market on behalf of certain well-connected entrepreneurs hasn't resulted in reliable paychecks for Aberdeen workers.
* * *
"There are a bunch of sleazebags who will sell anything." —Joop Bollen, president, South Dakota Regional Center, Inc. (South Dakota's EB-5 visa clearinghouse), quoted in Dune Lawrence, "Coming to America Costs $500,000 With Job Plan Prone to Failures," Bloomberg, 2012.03.22].