LEXINGTON, Neb. (AP) — A small town in rural Nebraska is losing its largest employer, a Tyson Foods beef plant, which will lay off 3,200 workers next month in a town of about 11,000 people.
Lexington, Nebraska, is expected to lose hundreds of families who will be forced to leave to look for other work. The exodus will likely cause spinoff layoffs in the city’s stores, restaurants and schools.
The impact on the city and workers will be “close to the poster child for hard times,” said Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana.
All in all, the loss of jobs is expected to reach 7,000, mostly in Lexington and surrounding counties, according to estimates from the University of Nebraska, Lincoln, and shared with The Associated Press. Tyson employees alone will lose about $241 million in pay and benefits each year.
It threatens to reveal a city where the American Dream was still attainable, where immigrants who didn’t speak English and never graduated high school bought homes, raised children in a safe community and sent them to college.
Tyson says it is closing the plant to “right-size” its beef business after a historically low U.S. cattle herd and the company’s expected $600 million loss on beef production next fiscal year.
Tyson workers, business owners and city leaders spoke to The Associated Press for a report on the plant closing.
Here are some takeaways.
The Tyson plant is central to the city’s economy and community
Lexington sits near the dead center of the United States, surrounded by corn fields, grain silos and cows.
The plant opened in 1990 and was bought by Tyson ten years later, attracting thousands of workers who work on cleaning crews and forklifts, on the slaughter floor and trimming cuts of meat.
The city nearly doubled in population and flourished with leafy neighborhoods, recreation centers, a single-screen movie theater and a good school system. Nearly half of the students in Lexington have a parent who works at the Tyson plant, school officials estimated.
Many Tyson workers have been living in Lexington for decades, building a community at the plant and in the city’s many churches, including Francisco Antonio.
The 52-year-old father of four said he will stay a few months in Lexington and look for work, although “there is no future now.” He took off his glasses, stopped, apologized and tried to explain his emotions.
“It’s mostly at home, not work,” he said, replacing his glasses with an embarrassed smile.
Tyson workers, devastated by the shutdown, have no clear plan
Thousands of Tyson workers have mortgages, car and insurance payments, property taxes or tuition costs that they will have no income to pay.
For many, finding another job is not easy, particularly older workers who do not speak English, have not graduated from high school and are not computer literate. The last application that some filled out was decades ago.
“We know that we only work in meat for Tyson, we have no other experience,” said Arab Adan. The Kenyan immigrant sat in his car with his two energetic sons, who asked him a question for which he has no answer: “Which state are we going to, dad?”
“They only want young people now,” said Juventino Castro, who has been working with Tyson for a quarter of a century. “I don’t know what will happen in the remaining time.”
Lupe Ceja saved some money, but it won’t last. Luz Alvidrez has a cleaning gig that will sustain her for a while. Others may return to Mexico for a time. No one has a clear plan.
“It’s not going to be easy,” said Fernando Sanchez, a Tyson worker for 35 years who stayed with his wife. “We started here from the beginning and it’s time to start from the beginning again.”
Tears rolled down his wife’s cheeks and he squeezed her hand.
The closure of the plant will ripple through local businesses
The domino effect can go something like this: If 1,000 families leave the city, said the economist Hicks – who would not be surprised if it is twice that – seats will be left empty in schools, which will lead to layoffs of teachers; there will be far fewer customers in restaurants, shops and other businesses.
Most of the customers at Los Jalapenos, a Mexican restaurant down the street from the plant, are Tyson workers. They fill the booths after work and are greeted by owner Armando Martinez with a mustache and a bellow of “Hola, amigo!”
If he can’t make ends meet, the restaurant will close, said Martinez, who is on dialysis for diabetes and has a leg amputee.
“There’s just nowhere we can go,” he said.
Many, including City Manager Joe Pepplitsch, are hoping Tyson will put the plant up for sale and a new company will come in to bring new jobs. This is not a quick solution, which requires time, negotiations, renovations and no guarantee of comparable jobs.
Pepplitsch, who noted that Tyson didn’t have to pay city taxes because of an agreement negotiated years ago, said that “Tyson owes this community. I think they have a responsibility here to help mitigate some of the impact.”
Asked by the AP for comment on plans for the site, Tyson said in a statement that it is “currently evaluating how we can repurpose the facility into our own production network.” It did not provide details or say whether it plans to offer support to the community through the plant’s closure.