Jindal Bails-out Chicken Plant
When the national media spotlight last shone on our beloved Guv'nah Bobby Jindal, he was making some noise about how government could do no right and the private sector could do no wrong in response to President Obama's near-State of the Union Address.
Cynics among us noted that the Louisiana economy about which Jindal boasted was floating on a sea of federal disaster relief funds that had flooded our state as the waters of hurricanes Katrina and Rita ebbed. Jindal's speech proved once and for all that he is a card-carrying member of the immune to faction of the Republican Party.
But, fate being what it is, Jindal has recently had an opportunity to revisit the role of government in the marketplace right here in his own state and -- gasp! -- has come down firmly in the government intervention side of the argument.
The incident that precipitated this conversion (or revelation of hypocrisy -- I merely report; you decide) was the bankruptcy of chicken giant Pilgrim's Pride. As part of this process, in February, the company decided to shut down a plant it operated near the town of Farmerville in Union Parish in northeast Louisiana. The plant employs about 1,300 workers and supports another 300 or so independent chicken ranchers in the region. The loss of those jobs would have delivered a devastating blow to the region (one of the poorest in the country) that was already reeling from losses in jobs in the paper, timber and chemical industries.
As the free marketeers would have predicted, a private sector buyer (Foster Farms of California) stepped forward. The company offered Pilgrims Pride $40 million for the plant that was headed towards a shutdown.
Pilgrim's Pride rejected the offer as insufficient.
Guv'nah Jindal and his administration decided that they needed to get involved (perhaps the decision was motivated by the fact that he had already decided to reject about $90 million in unemployment benefit enhancements in the federal economic stimulus package, but I digress).
The next offer for the Pilgrim's Pride plant in Farmerville was a joint offer involving Foster Farms and -- you guessed it! -- the State of Louisiana. The total offer was $60 million. Foster Farms had actually reduced its offer to $20 million, but Jindal (fancying himself as a latter day Colonel Sanders?) had his administration offer to put up $40 million.
Still, that was not enough to satisfy Pilgrim's Pride. The sale price, their CEO told the Monroe News Star, was $80 million. The state asked Foster Farms to increase its offer. Foster Farms agreed to go back to their original offer of $40 million, which the State of Louisiana matched, for a total bid of $80 million, which Pilgrim's Pride accepted on Friday.
It turns out that the state and Foster Farms are actually committing $100 million to buy the plant. The selling price is $80 million, but the company and the state have each committed $10 million to upgrade the plant.
So, the State of Louisiana has intervened in the marketplace to help save 1,600 jobs in northeast Louisiana. It's a good and necessary move that should help stabilize economic conditions in a part of our state that was already on the ropes.
But, it further exposes Jindal's supposed belief in the sanctity of the marketplace to be a sham that he wields when he believes it to be expedient.
That itself is pretty close to the definition of an opportunist. Hardly the type of guy to serve as the standard bearer of the Grand Ole Party of moral certainty.
Cynics among us noted that the Louisiana economy about which Jindal boasted was floating on a sea of federal disaster relief funds that had flooded our state as the waters of hurricanes Katrina and Rita ebbed. Jindal's speech proved once and for all that he is a card-carrying member of the immune to faction of the Republican Party.
But, fate being what it is, Jindal has recently had an opportunity to revisit the role of government in the marketplace right here in his own state and -- gasp! -- has come down firmly in the government intervention side of the argument.
The incident that precipitated this conversion (or revelation of hypocrisy -- I merely report; you decide) was the bankruptcy of chicken giant Pilgrim's Pride. As part of this process, in February, the company decided to shut down a plant it operated near the town of Farmerville in Union Parish in northeast Louisiana. The plant employs about 1,300 workers and supports another 300 or so independent chicken ranchers in the region. The loss of those jobs would have delivered a devastating blow to the region (one of the poorest in the country) that was already reeling from losses in jobs in the paper, timber and chemical industries.
As the free marketeers would have predicted, a private sector buyer (Foster Farms of California) stepped forward. The company offered Pilgrims Pride $40 million for the plant that was headed towards a shutdown.
Pilgrim's Pride rejected the offer as insufficient.
Guv'nah Jindal and his administration decided that they needed to get involved (perhaps the decision was motivated by the fact that he had already decided to reject about $90 million in unemployment benefit enhancements in the federal economic stimulus package, but I digress).
The next offer for the Pilgrim's Pride plant in Farmerville was a joint offer involving Foster Farms and -- you guessed it! -- the State of Louisiana. The total offer was $60 million. Foster Farms had actually reduced its offer to $20 million, but Jindal (fancying himself as a latter day Colonel Sanders?) had his administration offer to put up $40 million.
Still, that was not enough to satisfy Pilgrim's Pride. The sale price, their CEO told the Monroe News Star, was $80 million. The state asked Foster Farms to increase its offer. Foster Farms agreed to go back to their original offer of $40 million, which the State of Louisiana matched, for a total bid of $80 million, which Pilgrim's Pride accepted on Friday.
It turns out that the state and Foster Farms are actually committing $100 million to buy the plant. The selling price is $80 million, but the company and the state have each committed $10 million to upgrade the plant.
So, the State of Louisiana has intervened in the marketplace to help save 1,600 jobs in northeast Louisiana. It's a good and necessary move that should help stabilize economic conditions in a part of our state that was already on the ropes.
But, it further exposes Jindal's supposed belief in the sanctity of the marketplace to be a sham that he wields when he believes it to be expedient.
That itself is pretty close to the definition of an opportunist. Hardly the type of guy to serve as the standard bearer of the Grand Ole Party of moral certainty.
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Thanks for this....
Is Jindal accepting the stimulus $$$ now?
Really interesting post. Funny, I don't remember this being publicized on MSM. Maybe I missed it.
March 21, 2009 6:49 PM | Reply | Permalink
The Louisiana Secretary of Labor (appointed by Jindal) was quoted late last week that, it turns out, there are not as many strings attached to the unemployment dollars in the stimulus package as was once thought. This came after consultations with the U.S. Department of Labor. Jindal's latest is that they are still reviewing the Stimulus Package and no final decision has been made. His labor secretary has boxed him in a bit, now.
March 21, 2009 10:39 PM | Reply | Permalink
I dunno if the chickens are all that happy, but I suppose the shareholders are.
They're the only ones that actually count.
I wonder if Jindal has any economic interest.
March 21, 2009 7:52 PM | Reply | Permalink
I'm sorry chicken...seemed like some of your relatives might be spared...damn repubs!
March 21, 2009 8:01 PM | Reply | Permalink