Region braces for loss of $34 million Simplot facility, hundreds of jobs


Capital Press

When J.R. Simplot Co. shutters its Aberdeen processing plant in favor of a modern facility to be built near Caldwell, potato farmer Conan Feld has faith that local growers will avoid financial harm.

Feld reasons his fields are at the heart of America's potato country, where the crop is consistently too good to replace. The 37-year-old is less optimistic about the future of the small southeast Idaho agricultural community where he was born and raised.

On Nov. 9, Simplot announced plans to close three of its older Idaho plants in Aberdeen, Nampa and the Caldwell area. Simplot officials vow the 380,000-square-foot replacement plant will represent the company's largest single investment in Idaho. Its improved efficiencies will conserve water, reduce emissions and enable Simplot to achieve the same output as the three older plants with a fraction of the workforce.

The existing plants will remain open until the new facility is operational, likely by the spring of 2014. The so-called "super plant" will be staffed by 250 employees, a net job loss of just under 800 in the three communities.

As for the growers, "we've been told it's going to be business as usual," said Feld, who contracts his entire crop with Simplot. "The potatoes will be freighted to the super plant.

"I think there are still a lot of unanswered questions. My hope is they schedule a meeting and sit down with us and explain to us their thought process."

With Caldwell as the processing hub, University of Idaho Extension economist Paul Patterson envisions a gradual shift in where Simplot seeks its contracts.

"They're willing to accept some higher transportation costs to spread the risks out," Patterson said. "The issue is: Would there be some potential acreage shift from eastern Idaho further west, whether it ends up in the Magic Valley or even Malheur County, Ore.? I think that's a likely outcome. There will be some shift."

Simplot spokesman David Cuoio declined to speculate on the company's future requirements.

"I don't want to give the impression that every single grower will be a grower in the future," he said. "We have to look at the situation two or three years from now and decide how to proceed at that time."

The announcement

Simplot temporarily closed its Aberdeen plant on Nov. 9 so all four shifts could attend an employee meeting. Some workers speculated the intent was to celebrate a banner production year.

Instead, the 290 employees learned of eventual plans to close their factory.

Simplot then gathered a cross section of the region's elected officials at the company's administrative office in Pocatello.

Aberdeen Mayor Morgan Anderson was as incredulous as anyone in his Bingham County community, population 1,798. That night, Anderson sat in an empty City Council chambers with a blank expression, shaking his head.

"I didn't think Simplot would ever leave Aberdeen," Anderson said. "As well as I thought Simplot was going, I thought Simplot would be in Aberdeen forever."

The company has vowed to help its displaced workers with transitional services including separation packages, on-site counseling, outplacement services and other forms of assistance.

"Simplot is a family-owned business. The family members have lived in this area all their lives," Cuoio said. "They understand the impact this decision will have on a lot of people, and they did not make this decision lightly."

Talk of the town

As he filled the tank of his pickup and looked at the processing plant in the distance, rancher Dan Bolgen summed up the fears of many as the clock ticked on the largest single contributor to Aberdeen's economy.

"This whole town will probably just dry up," Bolgen said.

Inside the Country Kitchen, a group of Aberdeen Elementary School teachers analyzed the potential classroom ramifications.

"We've been discussing this all day, whether or not we'll have a job in three years or how many kids we'll be teaching," third-grade teacher Venna Harris said.

Mary George, a first-grade teacher, has two brothers-in-law who work at the plant, both of whom recently bought homes.

George learned about the plant's fate when her sister visited her classroom just before lunch that morning. For the next hour, George heard occasional gasps in the hall as other teachers were told.

"Around here, what other options are there?" George said.

A city's backbone

The Bingham County Commissioners assured Mayor Anderson they'll gather economic development experts to brainstorm potential plant uses.

Commissioner Cleone Jolley said company officials have ruled out selling it to a competitor.

"As soon as we can find out what they'll allow and what will work for that facility then we can recruit businesses that would work well for that," Jolley said.

Jolley found the mayor's response telling when he posed the question, "Do you think you can survive this?"

"I think we can," Anderson said. "I don't know what we'll look like when we get through."

The numbers are daunting. Of the 290 workers at the plant, 111 reside in Aberdeen and 141 live in Bingham County. Records at the Bingham County Courthouse show in 2010, the Simplot plant contributed 49 percent of Aberdeen's tax revenue, and 2 percent of the tax revenue in all of Bingham County. The assessed value of the plant, its land and its equipment is more than $34 million.

"You take that many people who don't have a job and where are they going to work?" Jolley asked. "When one thing pulls out, it's a ripple effect on all of the businesses in town."

The Idaho Department of Labor ran numbers through an economic modeling simulation to determine the broader impacts of the Aberdeen plant closure. The software determined the job losses will multiply by 2.3 across several industries, resulting in a total job loss of 667 in eastern Idaho, said Dan Cravens, the department's Pocatello regional economist.

"We're working with several agencies and organizations to try and provide some information related to resources and options that members of the Aberdeen community and other communities affected by the proposed plant closure can take to weather the storm more easily," Cravens said.

In limbo

Aberdeen Simplot plant employee Thomas Adamson said he's grateful to have a job, if only for a couple more years.

"I'm still trying do my best to keep a stable mindset. I've got to keep my head down and go to work and support my family," Adamson said.

The 31-year-old views the lengthy advanced notice about the closure as both a blessing and a curse. It gives him time to make himself more marketable.

He's pursuing an online business degree through University of Phoenix, and he hopes to participate in Six Sigma, a national program that provides workers a forum for identifying problems and proposing solutions. On the other hand, he's not certain when he should begin searching for other options. He may apply at Simplot's Pocatello fertilizer plant, but he understands it has little turnover. He also hopes to be in the running for a position at the super plant in Caldwell.

"I'm not looking at it like a dead end," Adamson said. "I'm looking at it as an opportunity to become an asset, to get more job skills and get more job experience."

Adamson and his wife, Teri, have three young children -- Cale, 7; Callie, 5; and Jase, 4. They moved to Aberdeen, Teri's hometown, after they married in 2004. Not to miss out on family time, Adamson squeezes in his studies between 10 p.m. and 3 a.m.

They purchased a house three years ago. Adamson fears selling the home after the plant closes may prove as difficult as finding new work.

"I think for now emotions have been reserved for a later date when it's closer to that time frame," Adamson said. "I don't harbor any ill feelings toward Simplot. I understand from a business perspective what they're doing and why they're doing it.

"It's just unfortunate I'm on the opposite end of it."

Nampa and Caldwell

In the short term, Nampa Mayor Tom Dale is concerned about the loss of 250 to 300 jobs when the Simplot plant closes in his city of about 81,600.

"As a business position, long term it's going to benefit Simplot Company and keep them healthy, which will benefit Idaho," Dale said.

Dale also sees potential for new trucking jobs to haul spuds from southeast Idaho to Caldwell.

"They're not leaving Idaho, and I think that's a good thing," Dale said.

Though Caldwell is poised to get the super plant, Steve Fultz, Caldwell economic development council director, pointed out his community will also lose jobs. The existing plant employs about 50 more workers than the future plant will require. Those new jobs will also be much more technical, he said.

"When we look at the scenario that could have occurred -- complete plant closure and jobs leaving the community -- we're very pleased jobs are staying here," Fultz said. "We still see it as a very positive thing for Caldwell."

Fultz, however, isn't optimistic that new tenants will be found for the vacant plants. He's witnessed a trend of companies preferring to build new facilities rather than moving into old ones when they expand into new communities.

"If Simplot is moving out of a building, you really have to scratch your head and say, 'How marketable are these buildings for reuse?'" Fultz said.

Retaining hope

Ritchey Toevs, an Aberdeen farmer who grows potatoes for Simplot, anticipates the company will pull more spud volume from Washington and Oregon after the plants close.

He trusts, however, that southeast Idaho growers will always play an important role in Simplot's portfolio.

"We think it's devastating for the community and the schools," Toevs said. "Everybody I talk to feels more concerned about that than us as producers. We will figure out a way to live through it."

Aberdeen has had its Simplot processing plant since 1973.

There's widespread hope among Aberdeen residents that when the spring of 2014 arrives, Simplot may find room for both its Aberdeen operation and the super plant. Cuoio declined to comment on that possibility.

"I've heard that quite a bit actually," Adamson said. "I honestly hope that happens. I'm a very down-to-earth type of person, and I don't know that would be the best move for Simplot businesswise."

Feld stressed things that look good on paper don't always work out in practice.

Though the plant may be antiquated, Feld believes the grower base and employee knowledge in Aberdeen are worth retaining.

"Some of these numbers we'd like explained about how they're more efficient than what we have right now," Feld said. "Why would you want to haul roughly 3 million sacks of potatoes four hours away to processing? I'm still hopeful that just maybe the J.R. Simplot Co. before this happens might come to an even better resolution."


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