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December 8, 2008

 

Pilgrim's Pride main headquarters "calm" after conglomerate filed for bankruptcy

 
 
The founder of the US' biggest poultry producer still manages to hand out US$20 bill along with "Jesus Saves' pamphlets and buys a US$3.99 oatmeal breakfast at Herschel's restaurant after the company joined the corporations' bankruptcy wagon.
 
Eighty-year-old Lonnie "Bo" Pilgrim is a hero in Pittsburgh where he built a small feed store which became the nation's largest chicken producer. Many who live here are now betting on Pilgrim to rescue his company from the Chapter 11 bankruptcy protection it filed on December 1.
 

The restructuring will be felt more in Pittsburgh, where Bo Pilgrim's first feed store is now a neglected local landmark. Its boarded-up windows and unkempt driveway serve as a reminder of what the town might look like had Pilgrim not cornered nearly a quarter of the US poultry market.

 

Pilgrim's Pride employs about 5,000 people at its headquarters and plants in and around Pittsburgh, a leafy community about 130 miles east of Dallas. Dozens of chicken farms dot the rural farmland in Camp County, and 18-wheelers hauling rattling chicken cages clang down the rural roads.

 

Job growth at Pilgrim's Pride was so robust five years ago that a school campus has reopened, and Pilgrim's Pride pledged US$130,000 annually to help pay the debt. The money isn't coming this year though, Pittsburgh school superintendent Judy Pollan said.

 

City leaders are unsure if Pilgrim's Pride will be on time with US$172,000 in taxes that provide one-fifth of Pittsburgh's revenue. Tim Nicholson, who tends a farm with 75,000 chickens that will become store-bought Pilgrim's Pride breasts, is unsure what the bankruptcy filing means for him.

 

But like many in Pittsburgh, he said he's not worried as he has a "lot of faith in Bo and he'll pull through".

 

Bo Pilgrim is an unavoidable presence in Pittsburgh. Downtown is a 75-foot prayer tower Pilgrim gave as a gift to the city; landscapers in trucks marked with the Pilgrim's Pride logo keep the grounds spotless and in front of the tower is Pilgrim's Bank. To the left is the Pilgrim's Community Room.
 

The skyline is a lone feed mill with a presence as large as the 30 million-pound capacity food freezer across from the company headquarters. Down the highway is Pilgrim's lavish mansion that locals call "Cluckingham Palace" -- the iron-gate entrance is cut in the shape of Pilgrim's signature silhouette.

 

Outside of Pittsburgh, Pilgrim has also its long spate of critics -- environmentalists concerned about Pilgrim's plants and government watchdogs wary of his political influence. But in Pittsburgh, many seem to be banking on Bo.

 

At Herschel's Restaurant -- which used to operate under the Pilgrim brand, too -- assistant manager Woodine Strawn said the Pilgrim's Pride regulars who stop in for lunch do not give a hint of worry as they believe the company would survive. However, she said her business would bust if Pilgrim's go out of business.

 

Pilgrim's Pride said in a filing that it had US$3.75 billion in assets and US$2.72 billion in debts as of Sept. 27. The chicken producer has been hobbled by the debt from its US$1.3 billion acquisition of rival Gold Kist Inc. in 2007, what analysts cite as the primary cause of its large debt load.

 

Its financial problems have been evident for months as many of the nation's meat producers saw their profits shrink in the wake of high commodity prices for items like corn and oil. An oversupply of meat on the market and dropping restaurant demand has hurt too.

 

Pilgrim's Pride spokesman Ray Atkinson said the company intends to pay its taxes. The matter is a concern for some local officials; Pollan, the school superintendent, said she'll be refurbishing three old school buses instead of buying new ones at US$90,000 apiece.

 

But many in Pittsburgh still feel better days are ahead.

 

Camp County Judge Thomas Cravey, the county's top elected official, said of Pilgrim as a "fighter" and it is not the end of Pilgrim's Pride.

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