NORPAC closing Salem plant, laying off 900 workers
More than 900 workers in Marion County will be left without a job come January, after farmer's cooperative NORPAC sent a layoff notice to employees of the Salem plant on Wednesday. The layoffs will also impact workers at the cannery in Brooks.
The closure will start on Jan. 12, but seasonal workers will be let go starting this week, according to the worker adjustment and retraining notification sent Wednesday.
John Asher, a rapid response coordinator at the Office of Workforce Investments, said there are two sessions planned for Dec. 3 to give workers services and information, like unemployment insurance and job skills.
Asher said most Salem residents know someone who's worked at the Salem plant, which had been around for nearly 100 years.
Marion County Farm Bureau President Dylan Wells said the ordeal had been a rough one for farmers as well.
"We have many families that have been growing crops for many generations that do not know if they will be growing those crops again next year," Wells said. "The capital investment that the farmers have in the specialty equipment that they have developed over the years of planting, cultivating and harvesting this vegetable crops is not a small number."
NORPAC filed for Chapter 11 bankruptcy in August with debts of more than $100 million, according to court filings.
An agreement with Oregon Potato Company to purchase NORPAC's facilities fell through in mid-October, president and CEO Shawn Campbell wrote in a letter delivered to employees yesterday. The company received an interim loan through Oct. 31 as part of its bankruptcy proceedings, but does not have other financing, he said.
A Nov. 19 report in the Capital Press noted that there are several "potential buyers" interested in NORPAC's plants in Stayton, Brooks and Salem, and that a major agriculture bank will likely agree to a "forbearance agreement" that would postpone asset seizure until Dec. 10.
"While NORPAC will continue to seek additional financing and to have discussions with various companies about purchasing its facilities, there is no guarantee that this will happen," Campbell wrote.
The company announced in September it would close its plant in Stayton and lay off 485 workers.
NORPAC started in Salem in 1924 and processed fruits and vegetables into canned and frozen products. In 2013, the company announced plans to move its headquarters from Stayton to Salem and built a new cold storage warehouse.
The layoffs will significantly increase the number of unemployed Salem-area residents. About 8,400 people in the Salem metro area were unemployed in September, according to the latest data from the state employment department.
It's not clear how many jobs are seasonal. November is typically when food manufacturing plants wind processing down for the season and lay off workers, state labor economist Pat O'Connor said.
Typically, the Mid-Willamette Valley loses about 700 seasonal agricultural jobs in November and December, he said.
O'Connor said the most noticeable economic impact would likely be to farmers and growers who process foods with NORPAC and could lose that resource if the company can't find a buyer.
"They are so big, and they have so many growers you hope there's going to be room for somebody to step in here," he said.
"This is not a situation where it is easy to just plant another crop. Many farms are diversified and can increase the production of other crops, yet there are many that can't make that change," Wells said. "Will we lose those farmers? Can some of the production go into fresh markets such as grocery stores or farmers markets? There are still a lot of questions to be answered."
Some NORPAC growers are also owed money by the company.
The state's economy has been strong, with unemployment hovering around 4% for three years. In Salem, about as many people are working now as one year ago, and jobs in manufacturing have remained steady.
"If you have to lose a job, it's as good a time as any," O'Connor said.
Some 4,900 people in the area worked in food manufacturing in September, according to state data.
Still, there is considerable unease and uncertainty at the rooted point of the issue.
"It is a tough time for vegetable growers in the valley who have already been facing many other difficulties to stay up with current legislation, the urban sprawl and pressure from vegetables being imported," Wells said. "Marion County Farm Bureau is here to help out any way we can. I hope we can weather another storm."
— Woodburn reporter Justin Much contributed to this story
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