DAKOTA DUNES | The founders of Beef Products Inc. have established a $10 million fund to benefit former workers at the BPI companies and communities that were affected by plant closures in 2012.
BPI laid off about 750 workers and closed production facilities in Waterloo, Iowa; Amarillo, Texas; and Garden City, Kansas; and Waterloo, Iowa, because sales had dropped after a series of reports about the company's Lean Finely Textured Beef product broadcast by ABC News.
"We remain committed to our employees and communities and so are dedicating $10 million to benefit the employees who lost their jobs in 2012," BPI founder Eldon Roth said in a news release announcing the establishment of the fund. "While it took us longer to get here than we had hoped, we are pleased to finally be able to reconnect with those former employees and see what we can do to help them continue to recover."
BPI corporate administrators Rich Jochum and Jennifer Letch will coordinate the review of applications for the funds with the help of the Siouxland Chamber of Commerce and other organizations in the affected communities.
"We are early in the planning stages but will be kicking off the process next month," Jochum said. "While we are still in the planning stages, participation criteria will likely include such things as length of service with BPI, amount of potential unemployment, impact of the loss of employment and similar factors."
BPI claimed sales of LFTB dropped from 5 million pounds per week to 1.3 million pounds per week in the wake of ABC's news reports, which repeatedly referred to LFTB, a beef product blended with ground beef to reduce its fat content, as "pink slime." BPI responded to the decreased sales by closing the three plants and reducing staff at its lone remaining production facility in South Sioux City and the corporate offices in Dakota Dunes.
In June, BPI settled a $1.9 billion lawsuit against ABC and correspondent Jim Avila for defamation and claims that the network had used false information about LFTB that led the public to believe the product was unsafe and not nutritious. The total amount of the settlement, reached midway through a trial in Elk Point, South Dakota, is confidential, but the Walt Disney Co., ABC's parent company, listed a $177 million litigation settlement in a quarterly filing with the U.S. Securities and Exchange Commission. That figure is believed to be a portion of the settlement not covered by Disney's insurance carriers.
BPI executive Regina Roth told the Sioux City Rotary Club earlier this summer that LFTB sales have rebounded to about 3 million pounds per week.
"The effects of the ABC News campaign were felt by more than just our employees and certainly continue on through today as we continue to operate only one of the four production facilities," Jochum said. "Only after we are able to re-establish markets and reopen the other plants will cattle producers, consumers and others that relied upon our production to add value to their communities be able to recover."