August 8, 2022

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Who’s to Blame for a Factory Shutdown: A Company, or California?

2 min read

VERNON, Calif. — Teresa Robles begins her shift around dawn most days at a pork processing plant in an industrial corridor four miles south of downtown Los Angeles. She spends eight hours on her feet cutting tripe, a repetitive motion that has given her constant joint pain, but also a $17.85-an-hour income that supports her family.

So in early June, when whispers began among the 1,800 workers that the facility would soon shut down, Ms. Robles, 57, hoped they were only rumors.

“But it was true,” she said somberly at the end of a recent shift, “and now each day inches a little closer to my last day.”  

The 436,000-square-foot factory, with roots dating back nearly a century, is scheduled to close early next year. Its Virginia-based owner, Smithfield Foods, says it will be cheaper to supply the region from factories in the Midwest than to continue operations here.

“Unfortunately, the escalating costs of doing business in California required this decision,” said Shane Smith, the chief executive of Smithfield, citing utility rates and a voter-approved law regulating how pigs can be housed.

Workers and company officials see a larger economic lesson in the impending shutdown. They just differ on what it is. To Ms. Robles, it is evidence that despite years of often perilous work, “we are just disposable to them.” For the meatpacker, it is a case of politics and regulation trumping commerce.

The cost of doing business in California is a longtime point of contention. It was cited last year when Tesla, the electric-vehicle maker that has been a Silicon Valley success story, announced that it was moving its headquarters to Texas. “There’s a limit to how big you can scale in the Bay Area,” said Elon Musk, Tesla’s chief executive, mentioning housing prices and long commutes.

As with many economic arguments, this one can take on a partisan hue.

Around the time of Tesla’s exit, a report by the conservative-leaning Hoover Institution at Stanford…

Kurtis Lee

2022-08-01 05:00:22

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