AFX.COM, February 20, 2007, Tuesday

Copyright 2007 AFX News Limited

AFX.COM

February 20, 2007 Tuesday 6:50 PM GMT

HEADLINE: Meat plant puts hard-luck town on edge

BODY:

HOOKER, Okla. (AP) - People started giving up on this place years ago.

The drug store and five-and-dime closed. The Ford and Chevrolet dealerships left, too, along with the tractor-parts retailers.

Vacant brick storefronts with sheets of yellowed newspaper taped in the windows are reminders of what once was in this speck of a cattle town in the Oklahoma Panhandle, a place where there are more cows and hogs than people.

A couple months ago, the lumber store shut down. It was a last gasp.

'It's a damn shame to see a town like this,' says Earl Meng, a member of the city council who has lived here for 60 years, as his pickup rolls over Hooker's cracked streets one recent morning.

Salvation, some locals hope, lies in a slaughterhouse.

Specifically, a Smithfield Beef processing plant to be built a few miles east of town, a $200 million project that will create as many as 3,000 jobs and put Hooker back on the map.

This would be the largest beef plant built in the United States in two decades, even as U.S. beef consumption has remained steady.

It's planned for an area that ranks among the nation's biggest producers of beef, grain and farm supplies. There are an estimated 600,000 head of cattle on farms within 25 miles of the proposed plant.

When the plans for the plant were announced in October, locals were ecstatic. But love turned quickly to loathing for a large group of residents who saw the plant as an attack on what was left of their struggling town.

They fear that the bulk of the jobs will be too low-paying and attract immigrants who will overwhelm city services.

'I'm not opposed to change, I'm just opposed to takeover,' says Don Ukens, a Hooker native who shuttered his Main Street TV and appliance shop in the 1990s.

Beef plant workers earn around $10 an hour, according to the U.S. Bureau of Labor Statistics. The jobs are dirty, strenuous and sometimes dangerous and attract a high number of immigrant laborers at plants across the U.S.

'It's a hard and relatively low-paying job, but it's the only opportunity that exists for many of these workers,' says Cornell University professor Lance Compa, an expert in labor law and international labor rights. 'These companies take advantage of these groups, they get super-exploited.'

Critics of the plant accuse local and state officials of rolling over for Smithfield and wonder who will pay for the expansion of the school buildings, fixing the streets and hiring new police officers as the town of 1,700 balloons.

Industry experts have concerns, too. Days after the plant's announcement, JP Morgan Chase analyst Pablo E. Zuanic wrote that a processing plant that size -- that would process 5,000 head of cattle daily -- would add too much capacity to the industry and worsen the plight of beef packers, already dealing with a glut of meat and poultry in the market that has held prices down.

Zuanic also questioned whether Smithfield was even going to build in Hooker. He theorized the real goal might be to buy out longtime rival Swift and the threat of a new plant would help achieve the takeover.

Last week, Smithfield Foods Inc. said it expected to report a decline in its fiscal third-quarter profit compared with a year ago. Last fiscal year, it had earnings of $172.7 million on $11.4 billion in sales.

As residents trade facts and rumors about the plant in Sunday church, farmer Jackie Stevens says she prays to God every night not to let the plant come.

'It's going to destroy the life we know,' Stevens says.

Rancher John Hairford is the unofficial leader of a group of 140 residents who oppose the plant, fearing it will lead to increased taxes, a crowded town and an influx of illegal immigrants.

'I have nothing against Latinos coming up here legally to work,' Hairford says. 'What we don't need is the gangs; we don't want the criminals.'

Meat operations in nearby Guymon; Cactus, Texas and Liberal, Kan., have attracted thousands of Mexican and Guatemalan laborers to the area in the past decade. Many already have settled in Hooker.

Retiree Howard Kopel, who lives a couple miles from where the plant will go, says, 'We're going to give our community to a bunch of strangers. I don't care if they come from old Mexico or New York City, but they're strangers and they bring another culture.'

Hooker's demography is already changing because of the neighboring meat plants.

Dozens of residents attend the Primera Iglesia Bautista, an outreach of the Baptist church here. Their kids go to the high school, where at least half the candidates for basketball homecoming queen were Latina.

'They live here, they're going to buy groceries here, they rent houses,' says Ruth Thompson, who teaches Sunday school at the iglesia and travels to Mexico every year on mission trips. 'They do everything everybody else does.'

Still, there is tension, perhaps heightened by federal immigration raids at Swift & Co. meatpacking plants in six states in December.

A sign for the local inn on the outskirts of town announces that it is American-owned.

For Smithfield's part, the company has no specific details yet on how it will assist the community, but has pledged to work with local officials as problems arise.

'Some folks probably look at this as a big change, so there is some level of trepidation,' says Mark Linzmeier, group vice president for business development for Smithfield Beef in Green Bay, Wis.

Linzmeier would not address speculation that his company is angling to buy Swift, but says the 'plant is happening' in Hooker and there is plenty of room in the region for the beef operation.

Ground breaking for the plant had been scheduled for January, but the company now says it will occur sometime during the first quarter. Linzmeier said Smithfield recently obtained building permits for the project.

He dismissed suggestions from some local officials that there has been a lack of contact between the company and the town.

'We're not a big fanfare company; that's not our style,' he said.

State Rep. Gus Blackwell, whose district includes Hooker, would like to see the company do more to communicate about issues that have been raised.

'I think Ronald Reagan had it best: trust, but verify,' he said. '(There's) a lot of problems to work out; we do need a contact person. Should this go on for another three or four months of nothing, it will cause concern.'

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