Posted: 3/16/2005 7:09:40 AM EDT
Thanks Bush. Glad that we can send that sugar money south to your people instead of trying to recover the American economy and keep some of our people working. 'Sad day' at sugar plant Wednesday, March 16, 2005 DEAN BOHN THE SAGINAW NEWS For 15 years, Charles B. Neuenfeldt's life was calm and on track.
But with the announcement that Michigan Sugar Co. will stop production at its Carrollton Township plant -- eliminating Neuenfeldt's job and those of 64 other full-time employees -- the 41-year-old Saginaw resident is reeling from speculation about his future.
"It scares the hell out of me," he said. "I've had a good job for 15 years. I can't complain about how Michigan Sugar treated me. But it's hard to be happy when you're losing your job."
Saginaw Township-based Michigan Sugar this spring will lay off the workers and halt production at the century-old Carrollton factory, 341 Sugar.
That means another 100 seasonal workers won't have jobs this fall.
The economic ripples are far-reaching.
Carrollton Township Supervisor Marvin Kozara said officials are trying to determine how big a hole the plant's closure will leave in municipal and school budgets.
"It's one of the biggest taxpayers in Carrollton," Kozara said. "We have to look at what kind of local services we'll have to lose or cut back on."
Cause and effect
A saturated market, rising energy costs and the fear of more sugar imports under the Central American Free Trade Agreement forced the closure, said Mark S. Flegenheimer, president and chief executive officer of Michigan Sugar.
"It's a tough thing to do," Flegenheimer said. "It's a lot of dedicated employees. It's no fault of anything they've done."
Company officials on Monday informed the work force of the factory closure. The last day of work, targeted for early spring, is still not set.
"Anytime you close a plant and take away jobs, it's a sad day for anyone," said Thomas V. Zimmer, chairman of the grower-owned co-operative and a sugar beet farmer who lives near Unionville in Tuscola County. "We didn't make (the decision) emotionally, we made it economically."
While production will end, the company will keep the site open for storage, packaging and distribution.
"Most all of the workers are 20-year employees," Flegenheimer said. "Their wages were $10 to $20 an hour, depending on their skills, position and seniority."
Neuenfeldt said most of the workers were in the upper end of the pay scale.
JoAnn T. Crary, president of Saginaw Future Inc., Saginaw County's economic development arm, said she hopes the displaced workers can find other jobs in the industry.
"This is very disappointing, but we're hopeful that some of the impacted workers will have opportunities at one of the other Michigan Sugar plants," she said.
Flegenheimer said it is too early to speculate if the other plants -- in Bay City, Caro, Croswell and Sebewaing -- could absorb any of the Carrollton workers. The Carrollton plant has the smallest capacity and highest fuel costs, he said.
The factory processes 3,200 tons of beets per day compared to 3,700 in Caro, 4,000 in Croswell, 5,500 in Sebewaing and 8,000 in Bay City.
All the plants are old -- built within two years of 1900 -- but the Carrollton plant constructed in 1902 operates on oil and natural gas. The Bay City plant operates on natural gas but has more modern, energy-efficient equipment, Flegenheimer said. The other three plants burn coal, which is cheaper.
"We would love to run it," he said. "But under current conditions, we can't. It was an economic decision."
The move will save $4 million to $6 million a year, he said.
Keith E. Pahl, vice president of Bakery, Confectionery, Tobacco Workers and Grain Millers Local 259 in Carrollton Township, would not comment Tuesday. The union represents workers at the plant.
The tip of the beet
The folding of sugar companies is becoming a national trend, Flegenheimer said.
"A factory in Idaho closed a month ago, two plants in Louisiana closed two months ago and one in Florida just announced that it will close after the next (processing) campaign," Flegenheimer said.
Company officials blamed imported sugar for squeezing mid-Michigan's grower-owned product off the market. The government regulates allotments determining how much each company can sell.
That has shrunk the amount Michigan Sugar can sell to 450,000 tons per year. The company has the capacity to produce more than 500,000 tons per year. Flegenheimer said free-trade agreements and foreign sugar are costing mid-Michigan farmers a significant percentage of the U.S. market.
"This country is making room for imports that we don't need," he said.
Flegenheimer said he doesn't know if the Carrollton plant will ever reopen.
"It's tough to speculate," he said. "A new farm bill is coming in 2007 and we're not sure what the provisions are or how the allotments to sell will be defined.
"If we keep doing the free-trade agreements, who knows if any of the plants will stay open."
U.S. Rep. Dale E. Kildee, a Flint Democrat, has fought against congressional passage of the Central American Free Trade Agreement.
"He believes (the plant closure) is just an early warning sign of how damaging CAFTA can be to the sugar industry, and he's going to fight it tooth and nail," said Kildee spokesman Peter Karafotas.
Although U.S. Rep. Dave Camp, a Midland Republican, is an avowed free trade advocate, spokesman Sage Eastman said Camp shares the same concern about the CAFTA effect on the mid-Michigan sugar industry.
"Frankly, how it impacted sugar was one of the reasons passage was delayed last year, and it's not on the schedule this year," he said.
Crary said Saginaw Future may enlist the support of Saginaw County Vision 2020s Government Committee to examine the potential impact of CAFTA and the 2007 federal Farm Bill on mid-Michigan.
"These are complicated global trading issues that are impacting Michigan Sugar and its growers that could very well spread to the entire Thumb of Michigan," she said in a prepared statement.
For now, Camp and Kildee are working on relief for sugar beet farmers already hit with an estimated $33 million loss in unrealized revenue because of sugar beet spoilage this year.
"We're seeing some movement, and we're garnering more support for relief. But there aren't quick and easy solutions when it comes to getting federal aid," Eastman said.
Sugar officials also plan to seek new ways to market their product because of the recent trend among consumers to use less of the sweetener.
"Sugar consumption has been flat or declined in the past two years for a variety of reasons -- the low-carb craze or whatever -- when we used to see steady increases in consumption in line with population growth," Flegenheimer said.
In response, growers are planting less.
The company has contracted farmers to grow 160,000 acres of beets this spring, 15,000 acres fewer than the acres/shares owned by growers.
"The growers are planting less sugar beets to try to match production with what we can sell," Flegenheimer said. "At least they know what's going on before the spring season starts and can switch to another crop."
Meanwhile, Neuenfeldt now is mainly preoccupied with the welfare of his children.
With two sons, 7 and 9, to raise, Neuenfeldt said he's trying to find another job before his ends in about a month.
"Every night I've been running Monster (an Internet job-search site) and calling everybody in the business that I know," said Neuenfeldt, agricultural manager at the plant.
"With a bachelor's degree in crop and soil sciences, it's not like you can walk into another job somewhere like I was a plumber or a contractor.
"It's hard to find a job to begin with, but harder for someone my age. I turn 42 in May. I may have to move."
Like most people, Neuenfeldt said, he has a mortgage, car payment and credit card bills.
"We just put in a new floor in the kitchen and bought a new dining room table," he said. "It's a few thousand dollars, nothing big, but it adds up." v © 2005 Saginaw News. Used with permission
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