Verboven: Cargill workers should heed the bigger picture of their new wage hikes
Will Verboven, Opinion, Calgary Herald (Canada)
Jan 07, 2022
That old adage “be careful what you wished for” might be kept in mind for those High River meat processing plant employees who recently voted to accept the latest wage offer by Cargill Ltd.
It would seem that wage offer would make them the highest-paid meat plant workers of all of Cargill’s North American beef processing plants. They should be commended for achieving that status as working in any meat processing facility is challenging work indeed.
But with that status comes the ominous reality that such high wage levels will, in all likelihood, make the Cargill High River plant their highest cost operation and probably make it uncompetitive compared to the company’s other plants.
That situation might be bearable except for one other looming reality; the High River plant is 32 years old and that’s pretty mature for such a labour-intensive operation. Undoubtedly, renovations have been made to the plant over the years to make it more efficient. But, like other industrial operations, there comes a time when a new, updated facility is the best economic decision to remain competitive.
However, a new plant in High River would bring its own harsh realities; for instance, new European meat processing plants now use half the workers they previously employed through advanced automation and robotics.
Furthermore, Cargill has over 30 meat protein operations spread out across North America; there is nothing sacred, special or strategic about the High River meat plant that guarantees its existence. For instance, Cargill could build a new world-class automated beef plant in Idaho, a jurisdiction that probably has lower labour and regulatory costs (hello there Canadian carbon tax) and better tax incentives than Alberta.
A new plant across the border would inconvenience Alberta cattle feedlot operators, but those savvy entrepreneurs, depending on marketing opportunities, already transport finished cattle as far south as Colorado.
I fully expect Cargill USA senior management to have a detailed future plan for their mature High River operation...