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Pilgrim’s Pride To Idle Louisiana Chicken Plant

Company will idle its north Louisiana chicken processing plant May 8, laying off about 1,300 workers, as negotiations over the sale of the facility continue.

NEW ORLEANS (AP) -- Pilgrim's Pride Corp. will idle its north Louisiana chicken processing plant May 8, laying off about 1,300 workers, as negotiations over the sale of the facility continue, a spokesman said Monday.

Ray Atkinson, the Texas-based company's director of corporate communications, said Pilgrim's Pride is moving forward with previously announced plans to idle the plant since "it isn't possible to know if or when a final agreement will be completed."

"The final day of work for most salaried and hourly employees will be May 8, 2009, when the plant ceases procession operations," he wrote in an e-mail.

In December, Pilgrim's Pride filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, and later announced plans to idle three plants, including the one in Farmerville, to cut costs amid a glut of chicken on the market.

Last month, the company said it had agreed to sell the facility to California-based Foster Farms for $80 million. Atkinson said no formal purchase agreement has yet been signed with Foster Farms, and any agreement will be subject to conditions and approvals, including that of a bankruptcy court.

State lawmakers, who convened for a nine-week session Monday, also must approve incentives state officials offered Foster Farms in trying to help broker a deal to save jobs in the largely rural area.

Sen. Mike Walsworth, R-West Monroe, said any furloughs add urgency to the need for lawmakers to sign off on that end of the deal.

While the companies have been tightlipped about who is committing what, Louisiana Economic Development Secretary Stephen Moret recently provided details on the state's offer: a $40 million "performance-based grant" to Foster Farms to buy and reopen the facility and to maintain "at least the vast majority of jobs," plus $10 million of an estimated $20 million for site improvements.

Moret said late Monday that he's cautiously optimistic the companies will complete an asset purchase agreement within 10 days, "which would allow the sale transaction to be quickly completed." He said he looked forward to that and other upcoming steps in the process, including the garnering of legislative approval.

"From day one, this has been about preserving thousands of jobs in northeast Louisiana, as well as retaining roughly $130 million to $160 million in state and local tax revenue over the next 10 years," he wrote in an e-mail.

Foster Farms Chief Executive Ron Foster said in a news release Monday that his company is continuing its negotiations with Pilgrim's Pride and "anticipates upgrading and adding to the capabilities" of the plant.

"These enhancements, when operational and used in conjunction with the local work force, will allow us to build a strong sales base, leading to a return to full, double shift capacity, over time, after Foster Farm's purchase," he said. The company said it also planned to continue using local chicken growers.

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