Limits Proposed on Companies Closing Facilities

The pending closure of an Oscar Mayer plant in Vernon that will leave 537 workers jobless sparked a call Monday for federal and state laws that would limit the freedom of healthy firms such as Oscar Mayer to shut facilities and move elsewhere.

At a congressional hearing in Vernon, Rep. Matthew Martinez (D-Montebello) suggested that Congress require corporations that wish to shut plants to file “economic impact statements� justifying their business decision and providing compensation for the financial and social problems caused by a closure.

And state Sen. Bill Greene (D-Los Angeles), chairman of the Senate Industrial Relations Committee, said he favored a state law conditioning tax breaks for business on a corporation’s pledge to keep its business operating in a fixed location for a certain number of years.

Wisconsin-based Oscar Mayer Foods Corp., which operates 21 manufacturing plants throughout the country and reported $2.3 billion in revenues last year, announced last March that it was closing the 39-year-old Vernon plant in September because it is too small and too old.

Martinez, whose district is home to a number of the plant’s workers, called Monday’s hearing as chairman of a House subcommittee on employment opportunities. He said he did so after failing to persuade Oscar Mayer’s parent corporation, Philip Morris Companies, to reconsider the plant closing in exchange for possible government assistance in modernizing the plant.

“It seems to me that a corporation should have a responsibility to communities in which it operates . . . before turning out that final light on the plant. Forty years of devotion and productivity dedicated to the company should earn the community a similar measure of caring,� Martinez said.

Leaders of United Food and Commercial Workers Local 770, which represents about three-quarters of the workers at the plant, have charged that Oscar Mayer’s true reason for shutting the Vernon plant is not its physical condition but the cost of its employees.

In shutting down the plant, Oscar Mayer is joining a national trend in which cost-conscious companies attempt to rid themselves of union shops and older workers. The Vernon plant meets both tests. Because it is unionized, workers make about $10 an hour. By contrast, non-union packing house workers often make only $6 an hour. And because 57% of the Vernon workers have 20 years or more seniority, their health, benefit and pension costs are relatively high.

The age of the work force and the fact that 75% of the employees are Latino will mean painful social dislocation for many workers once Oscar Mayer closes, the union says.

At Monday’s hearing, Ricardo Icaza, president of UFCW Local 770, vowed that his 28,000-member local is prepared to launch a consumer boycott of products marketed by Philip Morris Companies and its Kraft General Foods and Miller Brewing subsidiaries.

“Ironically, Philip Morris spends millions of dollars each year on advertising and philanthropic activities directed at (the Latino) community. . . . We believe an appeal from the Vernon workers to Hispanics across the nation, citing specially targeted Philip Morris products, would prove very effective,� Icaza said.