Wornick to stop packaging MREs in Texas

[kman]

I just ran across this story today:

McAllen soon won't be dishing out MREs
(source link)
Posted: 02/09/2006 12:00 AM CST

Jesse Bogan
Rio Grande Valley Bureau

McALLEN — When U.S. troops reach for their Meals-Ready-to-Eat, more often than not "McAllen, Texas, 78505" is printed across the bottom of the rubbery tan packets.

But that soon will change.

Twenty-seven years after it started production of the storied field rations in the Rio Grande Valley, Cincinnati-based Wornick Co. is closing its McAllen plant, which employs 270 people, in order to move its packaging line closer to home.

For years a leading producer of MREs and the top producer in 2005, Wornick has been awarded at least $420.9 million in Defense Department contracts since 2003.

In feeding the war effort in Iraq and relief efforts after hurricanes Katrina and Rita, workers in McAllen helped package 72 million MRE pouches — the most popular entrees being chili with hot sauce, jambalaya and beef ravioli with meat.

The closing will be phased in over the next six months.

"The performance of the McAllen work force has been exemplary, and this has nothing to do at all with the plant's performance, rather with its footprint, where it's located," said Brian Lutes, Wornick's chief financial officer.

The food is prepared in Ohio, trucked to McAllen for packaging, then delivered to the military.

Higher gas prices, employee duplication and inventory control issues have forced the company to rethink that geography, Lutes said.

"The logistics setup today, with our food processing in Cincinnati being 1,550 miles away from assembly operations in McAllen, it's very inefficient on the basis of a number of things," he said. "It lacks speed and flexibility. There is a lot of cost involved in managing the fuel costs of moving finished entrees from McAllen."

A new location hasn't been determined, but it will be in the "tri-state area" around Cincinnati, Lutes said. That area comprises parts of Ohio, Kentucky and Indiana.

All McAllen employees have the opportunity to apply for positions at the new plant with "some relocation assistance provided," Lutes said.

"They will absolutely have priority," he said. "We are very sensitive to (the pending job losses) and we are going to work as hard as we can to minimize the impact on the workers and the supplier families in and around McAllen."

Rosa Hernandez, 47, of Pharr, who makes $8.33 per hour as a janitor, said workers were told Tuesday the plant would close.

Asked if she'd consider a move to Ohio, she said: "It's very far away, and they don't pay very well."

"More than 15 years here, it's difficult, but what can we do?" Hernandez asked as she left the plant through a guarded gate.

Behind her, a 14-bay loading dock stretched along a flat building more than a football field long.

"It affects all of us, because we don't have other sources of work," said Martha Garcia, 42, a mother of three kids who has worked at the plant 17 years.

The executive director of the McAllen Chamber of Commerce, Steve Ahlenius, said the closing doesn't support the trend of companies relocating along the U.S.-Mexico border to take advantage of a cheap, young and nonunion labor pool.

"When you see some of the advantages that your area has to compete, you hate to see companies pick up and move away," Ahlenius said. "I think it's a mistake on their part. I think the stronger argument is to move the Cincinnati operations (to the Valley), instead of moving this operation up there."

He said Wornick's decision would produce the largest set of layoffs in McAllen since Levi Strauss closed its operations here in 1999, with the loss of 800 jobs, part of a larger flight of garment industry jobs from the Valley and South Texas.

Gov. Rick Perry's office was aware of Wornick's plans and hoped to convince the company to stay put.

"We are working with the company's owners to find ways they can expand their operations in Texas and not have to close the facility," Perry spokeswoman Rachael Novier said in an e-mail. "Gov. Perry has also contacted the Department of Defense to request a delay, due to the importance of their defense-related products."

Wornick was bought in 2004 by Veritas Capital, a private equity investment firm in New York that invests in defense- and aerospace-related companies, according to its Web site.

"I think they are going to increase the profitability of the company and look at selling it," Ahlenius said.

Veritas officials couldn't be reached for comment.

In 2004, Wornick drew headlines when a federal probe targeted the McAllen operation to see if al-Qaida operatives were working at the plant to tamper with food rations for U.S. troops.

The investigation found no terror links, but turned up 10 undocumented immigrants working there.

A San Antonio company, Tollin Group Inc., which was contracted to hire workers for the Wornick factory, agreed to pay $414,000 to the government to settle accusations that it falsified forms to get undocumented immigrants jobs there.

"Neither of those situations had anything to do with this closing," the company's Lutes said.

While you hate to see a plant closing down and people losing work, it makes sense that they'd move the packaging facilities closer to where the components are being baked/cooked/processed/mechanically-separated.

[QMGE81A]

Great info Kman! Is it known what years MREs were produced in McAllen TX? It says they’ve had Government contracts since 2003, but also says they produced rations for 27 years prior to the article date (2006). Trying to date a light tan MRE, produced at the McAllen plant. It’s a Ham Slice Menu 1.

[Smitty]

. It’s a Ham Slice Menu 1.

Weeeeiiiird. You should make a new thread and post a photo.