The South Dakota Department of Labor sent officials to Aberdeen Friday to meet with the 260 workers laid off by the state-boosted and bankrupt Northern Beef Packers slaughterhouse. It didn't go well:
Northern Beef Packers still owes hundreds of workers back wages. Some of those former employees say they're behind on bills and need that money now.
But state officials say there's little they can do at this point. Still, they're trying to help those workers in any way they can.
..."When are you going to get your back wages? I cannot tell you; I do not know," South Dakota Department of Labor’s Bill Molseed said.
Officials say the state could take action if Northern Beef Packers hadn't already filed for bankruptcy protection. Since it has, the issue is now tied up in the courts [Erich Schaffhauser, "Beef Plant Workers Meet with Dept. of Labor," KELOLand.com, 2013.07.26].
Indeed, with 277 creditors lined up for their due, many of them with bigger money at stake and bigger lawyers ready to make their argument in bankruptcy court, stiffed workers struggling to make rent face a hard battle to get paid for the work they've done.
If those workers have any savings left, they could move to Sioux Falls and work at Costco. They could give South Dakota native and beef entrepreneur Keith DeHaan a call and invite him to bring his ambitions to Aberdeen, buy NBP, and put them all back to work. (Scottsbluff, Nebraska said no to a new slaughterhouse; Aberdeen, here's your chance!)
Or they could turn the Attorney General of the State of South Dakota and say, "Pierre created this mess; Pierre can help us out of it." So says Libertarian blogger Ken Santema:
...it is best for the State to provide emergency support for these families. This would not be a case of welfare or government intervention, it is a case of the State stepping in to help band-aid a situation it created. Apparently the State of South Dakota has a surplus of $24.2 million when the fiscal year ended last month. Part of that money could be used as short-term relief for these families until NBP is forced to pay its workers. If that means creating a special session of the legislature I would say that is OK. Right now what is important is to help these families, and determine later how to prevent such situation in the future [Ken Santema, "The State of South Dakota must help correct the situation it created at Northern Beef Packers," SoDakLiberty, 2013.07.29].
Here's another situation where we Democrats can find common cause with conservatives disillusioned with the South Dakota GOP and its failure of principles. The state made Northern Beef Packers possible with the EB-5 green-card-buying program and some loan legerdemain. NBP has harmed its workers and its community. The state should step in to rectify that harm. Let me enhance Santema's call for state action with a specific plan:
- Allocate whatever chunk of the budget surplus is necessary to pay all affected workers their back wages. We acted fast to help M. Michael Rounds and his well-heeled neighbors and golfing buddies who built big houses in a flood plain; we can act just as fast, without a special session, to help working people whose only error was going to work for a slaughterhouse with bad management and cash flow.
- Seize the Northern Beef Packers property by eminent domain. NBP screwed up; the property is sitting idle. The state should take the property, sell it, and replenish the funds used for worker aid with the proceeds. Perhaps better yet, the state should get back into business: nationalize NBP (or is it state-alize?), hire back all the workers, and run the plant the way we ran the State Cement Plant for eight decades.
- Invoke extraordinary rendition to bundle the NBP money handlers off to South Korea, where they can explain themselves to their investors and the Korean legal system.
The state bears a share of responsibility for the economic disaster that has befallen 260 Aberdeen workers. Instead of sending Department of Labor bureaucrats to hand out forms and say their hands are tied, it's time for Pierre to own its mistakes and help these workers.
Way back when I first went to college we learned that in a bankruptcy first the workers get paid then the suppliers and then the creditors and then the stockholders if there is anything left. So when government pays the workers we are really paying the stockholders. But now days the corporations are people and workers have lost a lot of rights so I am not sure that the old laws that I learned still hold.
The workers can not afford the worst most deceitful lawyers so they might lose.
"We acted fast to help M. Michael Rounds and his well-heeled neighbors and golfing buddies who built big houses in a flood plain; we can act just as fast, without a special session, to help working people whose only error was going to work for a slaughterhouse with bad management and cash flow."
No absolutely not. It was a bad idea then and it is a bad idea now. Remember how much everyone hated that river decision,"except the ones that lived there?"If your thoughts are getting even for the first mistake by doing this, something's wrong, and both were or are bad. Where would you draw the line? After all this isn't the first time this has happened in this state, and it wont be the last.
"Seize the Northern Beef Packers property by eminent domain. NBP screwed up; the property is sitting idle. The state should take the property, sell it, and replenish the funds used for worker aid with the proceeds."
Talk about opening a can of warms. Where would the state get the legal authority to do such a thing. No mater how bad that situation is you have to remember one thing. The state of South Dakota was acting as a bank in this transaction and has no more rights then any other creditor involved in litigation. Like it or not the state took a chance and under Mike Rounds it failed to fulfill it's expectations.
"Perhaps better yet, the state should get back into business: nationalize NBP (or is it state-alize?), hire back all the workers, and run the plant the way we ran the State Cement Plant for eight decades."
Aren't there a couple of differences we should talk about? Cement plant successful, NBP failure. Cement plant, money maker, NBP looser. Why would we want to put ourselves in a business that had little chance for success in the first place? The meat packing business is a "dog eat dog" business. They come and they go, just like NBP.
Here is a question for you. Are those workers at NBP any more entitled to cash from the state then say, a person in a small town that looses their job because the business closes down? I don't think so.
"The state bears a share of responsibility for the economic disaster that has befallen 260 Aberdeen workers. Instead of sending Department of Labor bureaucrats to hand out forms and say their hands are tied, it's time for Pierre to own its mistakes and help these workers."
Again when you find a bank that would do such a thing let me know about it. Those workers took jobs and being more to the point took the same risk that every worker takes in a job. It might not be there in the long run. You can hook these problems onto the political horse in Pierre but those people work for many more then the ones that lost their jobs at NBP. How do you see that ending?
You can't fix every wrong. No mater how much you want to help you end up picking winners and losers. It was wrong to help those on the river, if you felt that way, and I know many that did, you should feel the same way about this.
The Blindman
google up state of sd loans and grants to NBP!!!!! Dec. 29,2010,mixture of loans and one million$ grant to NBP by Rounds. July 28, $1.2 million grant to sd development corp. to provide conditional loan to NBP!!!!!!! They can't help these workers out a little bit?? Baloney!!!!! How about Brown county and city of Aberdeen? Letting their taxes and sewer and water bills ride? If some poor laborer would let there utilities miss a payment they would shut there water off and the tax man would sell there property!!!!!
HELLLLO AMERICA!!!!!!!
What prevents the Brookings cheese factory from threatening bankruptcy if profits go into the toilet?
Rollin, it looks to me like Brown county and city of Aberdeen went to the track and bet on a sure thing only tho find out that the horse wasnt a mudder on a rainy day. They bet and they lost, that shouldnt be the rest of the states problem. They wanted the plant because of what? That's right it was "money." They were willing to bend over backward for that money when they thought it was a sure thing, they can eat the loss now.
The Blindman
Perhaps the state should rethink it's "bigger is better" economic development policies. NBP, the Brookings cheese plant and CAFO's represent giant risks to the community and the state. May be some will succeed and maybe others will fail, spectacularly in NPB's case, but I think we should be looking at building small businesses and farms rather than gambling on these type of projects.
I do think that Bel Cheese factory being brought into Brookings is different than the NBP situation. Bel brands is an established company with plenty of resources and has shown that it can work. I didn't like the fact that we have given them 5 million to bring them here because it was simply a bribe and a large one.
This concept of focusing on large business can spur lots of small businesses if one, they are properly vetted for stability; two, the impact of the community is properly verified by independent sources; and three, if there is not a need for massive support to get things off and running (that is typically a sign of instability).
I don't want to get to the point of never using government dollars to develop the business sector, but I have to agree with Frank James and think we should put more focus on small business and possibly even more micro loans.
Bill, the NBP workers are more entitled to state assistance, because the state made their jobs possible.
I don't think it would be wise to use eminent domain or getting the taxpayers in the beef plant business (well, more than they already are). Thanks to Rounds, Aderbeen Deveopment Corp, Aberdeen City Council, Brown County Commissioners, etc... this has become a taxpayer problem.
Beyond immediately helping the families that were affected I see a different path going forward. Its time for the State to get out of the situation. As an investor in NBP the taxpayers got screwed. However further action from the State would do nothing but prolong a disastrous situation. It would be a good time to get the State completely out of trying to manipulate the economy.
I was talking to someone earlier today that joked about NBP being "little Detroit". I don't think he was too far off with this comments. Both situations are examples of what happens when politicians try to use good intentions and taxpayer dollars to make a stronger economy.
The best case going forward would be for NBP to sell all of its assets. In that case the investors will likely be screwed, but at least they will get something. Then a company can acquire the property that can actually do something with it; including having better strategic planning that will create long-lasting jobs.
I hear too many people joke about NBP here in Aberdeen a lot. I really wish fewer people would joke and actually start to get mad about how their taxpayer dollars are being used.
DD went to China and helped sell Smithfield: why would he not do the same for NBP?
Look at all the government entities you just named, Ken: NBP might as well be a state-owned enterprise!
to you south dakota voters. Maybe it would be a good idea to check out the candidates before voting for them rather than just looking for that box at the top of the ballot that says republican or democrat and put one big X in it!!!!!!
Once they filed bankruptcy, there is little the state or anyone else can do. Bankruptcy must work itself out. We shouldn't have intervened on the bankruptcy of GM/Chrysler and we shouldn't with NBP. I have no idea what Ken is thinking, except maybe it hits too close to home.
FYI: Back wages (up to a certain amount and certain conditions) have a statutory priority even over secured claims.
Just by reading what CH has cut and pasted (which may unintentionally miss certain critical pieces of information), White Oak (or whoever is the first secured lender) will get title after paying all the prior statutory liens off.
I agree with Troy, there should be no intervention. And now I've actually read the further stories about the current bankruptcy proceedings so I understand it better (although I am going to keep researching before talking more about that, some things aren't adding up).
What I really want is for this to no longer be a taxpayer problem. Let the bankruptcy proceed as it will. Whatever happens from that point on let the business fail or succeed without taxpayer dollars intervening.
This is a classic example of unintended consequences of government intervention into the market. Due to taxpayer subsidies and EB-5 money NBP did not have to operate in a fiscally prudent manner.
I really hope we don't see an intervention from Pierre, except perhaps to help the workers that were screwed over by the unintended consequences of crony capitalism using taxpayer dollars.
it's called moral hazard: a bankster's ploy.
The only intervention I would like to see is that the workers are compensated.
Troy, who should be accountable for the loss of taxpayer money and the pure anguish that the workers must be going through.
Remind me again of the research and market certainty of the South Dakota Beef program that ultimately led to this failure.
Sure looked good on paper if you were a politician looking for votes.
Mom's and dads are in severe pain and hurting...but not so much anyone in charge of the taxpayer money.
Just checked the websites and not one word of support, regret...what's next from the Governor or the GOED.
Maybe someone will ask Senate candidate Mike Rounds, who masterminded the program, how he feels about the complete and total failure of the program and at least try and elicit on iota of empathy for the workers who got screwed in the whole deal.
At least the Governor is still promoting how wonderful his Lt. Gov is and ironically how South Dakota is #1 for business! But don't worry about the devistated labor and their families that got screwed...we ended the year with a surplus while cutting education and healthcare for seniors!
There you have it SD...the GOP loves anybody but those that work outside of the corner office.
Here's candidate Round's statement from a few days ago on how strong his vision is.
"In the first eight years of the program, only 16,386 cattle — a tiny slice of a state herd that approaches 4 million head — have been enrolled by farmers and ranchers. Only 500 have made it all the way through the program to be sold as meat from the program, mostly just within South Dakota from cattle processed by small custom meat lockers.
Rounds, now running for the U.S. Senate, still thinks the program will succeed once the Aberdeen packing plant is running at full speed and more buyers demand verification of when and where cattle are born.
“I think its time will come,” Rounds said earlier this month."
Will someone remind Governor Rounds that the time for this to work was something a little closer to 2005...not 8 years and millions of dollars later?
Interesting that food is the topic and the multi millions that our state has us on the hook for. The workers not only get shafted by the state for thinking that they were doing legitimate work, it turns out that in 90 some days the food stamps to keep their bellies full will be ended as well. Nothing and I mean nothing smells more like a sewer than Mike Rounds and the rest of the rats on this failed ship of fools, shame on them and those who support them. Have we had enough yet?
You could always turn it into a giant thrift store. Seems like everything else that closed down in Aberdeen has turned into one. :-)