From an editorial Friday in the (Raleigh) News & Observer:
The first questions that Smithfield Foods workers in North Carolina, 10,000 of them, are asking are: How will this affect me and is my job safe? Ditto for 36,000 other Smithfield workers worldwide.
And while Smithfield Foods CEO C. Larry Pope is praising the deal to sell the company and saying that Chinas Shuanghui International Holdings will maintain staff and management, workers have a right to be concerned. Thats not because of any problems thus far evident, but the sale of a huge company always creates uncertainty among employees, whether the sale is to a foreign-based company or one in Nebraska.
Its also true that in paying $4.72 billion, as is proposed (stockholders and the government have to approve the deal), the buyer is certain to look for savings anywhere it can find them.
This is not selling out to the Chinese, Pope said, perhaps in a moment of excitement. Because it is selling out to the Chinese, which isnt necessarily a bad thing. Still, foreign acquisitions, and Chinese firms have made several, are a little disconcerting. Virginia-based Smithfield has grown and prospered since its founding in 1936 as a family concern. It appears the offer was one it couldnt refuse.
China, after all, is the worlds largest pork consumer, and Popes case to farmers was that the sale will provide them with stability for the future, that their market will grow. Shuanghui did have to recall meat containing a banned drug two years ago, but that problem seems to have been straightened out, and Pope promised standards will remain strong.
It will be interesting to see if North Carolinas farmers share that optimism, assuming the deal goes through. Economists and others note that the planned purchase is more evidence that Chinese businesses are being encouraged to actually invest in American companies rather than just holding American debt, which many do.
Its true the global economy is a reality. Let us just hope that United States-based companies continue to strive for innovation and expansion...including going into China.
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