A Tyson Foods beef processing plant in Holcomb, Kan., sustained heavy damage in a fire Friday, causing it to close indefinitely and idling some 3,800 workers.
On Monday, the company said it will provide "guaranteed pay" for the workers until the plant is made operational.
Officials are assessing the damage to the facility and are working to clean up the scene, but it is too early to establish a timeline for a return to operation, Tyson said. There were no reported injuries.
"This is a difficult time for our team members and their families, and we want to ensure they're taken care of," Steve Stouffer, group president of Tyson Fresh Meats, said in a statement Monday.
Company officials informed full-time, active workers they would be paid weekly until production resumes. Workers may be called in to help with cleanup efforts and other projects, "but regardless of hours worked, all full-time active employees are guaranteed pay," Stouffer said.
In an email, Tyson spokesman Worth Sparkman said about 3,800 people work at the fresh meats processing plant in Holcomb, about 220 miles west of Wichita.
The plant can process about 6,000 head of cattle per day, or 15% to 25% of Tyson's total beef processing capacity, according to a Stephens Inc. analysis. The plant shutdown will result in beefier margins for the industry, given a reduction in demand for cattle and lower beef output; by how much depends on how long the plant is closed, Stephens analyst Ben Bienvenu said in a research note Monday.
In Tyson's quarterly earnings report last week, the company's beef business reported sales of $4.1 billion and income of $270 million, outpacing all of Tyson's other businesses, including pork, prepared foods and chicken.
"We expect Tyson to face negative headwinds from the fire given the size of the plant," Bienvenu said. However, higher margins at Tyson's other plants should help offset the negative impact.
The fire started at the facility late Friday and continued through the night and into Saturday afternoon. The blaze was extinguished by 3 p.m., officials told local media Saturday. Firefighters had control of the fire by 9:30 a.m. and kept crews at the scene to put down any flare-ups, CBS affiliate KWCH-12 reported. Tyson employees were allowed to retrieve their belongings, such as keys and wallets, later that afternoon.
About 1,200 employees were at the scene when the fire started and were safely evacuated, KWCH-12 reported. The cause has not yet been determined.
Tyson also plans to move production from its shuttered plant to other processing sites. Stouffer said the plants have the capacity to handle scenarios like this and "we will use other plants within our network to help keep our supply chain full."
The Springdale-based company owns six plants in Kansas, employing 5,600 people. Tyson paid wages of $269 million within Kansas in fiscal 2018.
Shares of Tyson fell 10 cents, or less than 1%, to close Monday at $88.27. They have been as high as $89.34 and as low as $49.77 in the past 52 weeks.
Business on 08/13/2019
Print Headline: Tyson reassures workers after fire