But now the county commission is firmly in the hands of the GOP. So now when there is a loss of jobs in the county, the same people who looked no further than local politicians now need to find someone else, who is a Democrat of course, to blame. People who previously blamed county job losses on local politicians have suddenly opened their minds to global or statewide trends.
The recent announcement of the closing of the Townshend's chicken plant is a perfect example. The local Republicans have gone through a few scapegoats, none of them local, but all of them Democrats.
Here is a link to the N&O's article about the closing. This article devotes significant space to the effect of high corn prices on the chicken raising model.
First GOP scapegoat: ethanol loving environmentalists
So naturally, the blame must be with environmentalists who are forcing us to create ethanol, driving up the price of corn! There are two problems with that theory.
The first problem is that environmentalists are not responsible for ethanol subsidies and mandates. Politically powerful agribusiness lobbies are. After all, among the politicians who support ethanol are such liberal environmentalists as Mitt Romney and Newt Gingrich. What do these GOP stalwarts have in common? Oh yeah, they are running for President and need to do well in the Iowa caucuses. Meanwhile, the GOP candidate who has come out most strongly against ethanol subsidies is Jon Huntsman, who is arguably the most liberal GOP candidate and is coincidentally skipping the Iowa caucuses.
The second problem with that explanation is that the price of corn really didn't increase much while Omtron owned the plant. It is true that it has shot up in the last year, but during the five months between Omtron's purchase and decision to close the plant (Feb 2011 to July 2011), the price of corn went up only 4%, from $293 per metric ton to $305. During that time frame, the peak price was $319, but that was in April and it's been going down ever since. So Omtron decided to close the plant after three months of steady declines in the price of corn. You can look at the historical price data here.
Second GOP scapegoat: State government (but only the parts controlled by Democrats)
An interesting rumor started making the rounds that the state of NC would not let the owner of the chicken plants use state ports to import cheap corn from Ukraine. You see it turns out that apparently Omtron's plan was to use the fact that they had signfiicant food processing interests in the Ukraine to get cheap corn for their chickens, therefore beating the grain market. What a brilliant plan. Until, according to local GOP activists, it was spoiled by Bev Perdue and David Price.
Normally it's hard to trace false rumors like this back to the source, but in this case it can be traced to its source. Tom Glendinning, frequent conservative poster to the Chatham Chatlist and staunch Brian Bock supporter appears to have started this rumor. He posted this rumor to Brian Bock's facebook page (see screen shot) and sure enough within an hour of that posting going up, Bock's supporters ran with it and used this "fact" to make BBS postings blaming governor Bev Perdue for the closing of this plant.
Tom also posted this "discovery" of his to the Chatham Chatlist. Here is part of what he posted:
And if you get a chance to whisper in the governor's or David Price's ear, let her know that we would like an unloading dock permitted for Omtron so that it can bring the grain over to feed the chickens, to sell the meat, to pay the workers, to pay the taxes, and let us get back to living again rather than dusting off our tents to set up our "primary dwelling spaces."
Now one thing is strange about this, besides the fact that this "fact" is false (which I'll get to in a minute). And that is, why is David Price's name even mentioned? David Price doesn't have authority over NC's ports. David Price doesn't represent the part of the state where the ports are located. David Price also doesn't represent the part of the state where the chicken plants are. Why in the world would he be involved? Besides the fact that he's the nearest Democrat that Tom can lash out at, that is.
If the port rumor were true, I could see Bev Perdue having something to do with it, but trying to pin this on David Price is just silliness.
Now about this "fact" about the port. None of the news stories about the plant closing mention any problem with the port. In fact, besides Tom's "this guy I know said it" rumor, I can't find any evidence of any problem with the ports.
So I contacted Dianne Reid, the head of the Chatham Economic Development Corporation to ask if she had heard of any problem with the ports. Not only did she respond that she was aware of no problem with the ports, but she had also asked the state commerce secretary and he wasn't aware of any port issue either.
(update 8/11/11). More info on this has come to light, from this Chatham County BBS posting. This is NC Secretary of Commerce Crisco being paraphrased by Pittsboro Mayor Randy Voller, this was discussed at a Triangle-J Council of Governments meeting at which Mr. Crisco was the guest speaker (and commissioner chair Brian Bock was absent).
"...Omtron has had a good offer for the facilities, which they have so far declined to accept. Omtron was well aware that North Carolina was not set up with a grain elevator at our port(s) yet pursued the purchase of Townsend's through the bankruptcy court. The state was working with Omtron to contract such a facility. The state was about a month behind schedule, but all parties anticipated its completion in a reasonable time frame to meet Omtron's needs. Omtron's Ukrainian management told the state that they were pulling out not due to this situation but because of some unspecified grant they claim to have been promised by an agency in the federal government. Sec. Crisco said that his department could not verify the veracity of this claim."
So who's my scapegoat?
When I have disputed partisan GOP explanations for the closing of the chicken plants, I am often asked for my own.
The N&O article about the closing is probably most accurate and it mentions two factors worth mentioning.
The first factor is a supposed lack of discipline in the U. S. poultry industry. At first blush this might seem like a swipe at the workers in the plants, many of whom our Republican friends like to remind us are illegal aliens. However it only looks like that if you don't read the next sentence. Here is the "discipline" quote, in its full context:
He just decided to shut it down and take his losses and go on," said David Purtle, a former Tyson Foods executive who was hired to be Omtron's CEO. "He just didn't like the environment in this country and the lack of discipline that the poultry industry had."
The U.S. poultry industry has been resisting calls to reduce production levels, something that many believe is necessary in order to put it on firmer financial footing.
It's clear that by "discipline" Omtron's CEO isn't referring to shiftless workers. He's referring to price fixing and production controls.
The next factor is the price of feed. As I described above, the market price of corn didn't increase significantly during Omtron's ownership of the chicken plants. However the N&O article about his purchase of the plants, in February, referred to a plan to beat the corn market by importing cheap corn from Ukraine. Even the reporter who wrote that story thought that was pretty tenuous plan, but it was a plan.
Who ruined the cheap corn plan?
However that plan didn't look quite as good when, on July 1st, the Ukraine government imposed a 12% export tax on corn. As the linked story said, this caused corn exports from Ukraine to become uncompetitive and plummet 75% in a month. Clearly if you had a plan based on getting cheaper corn from Ukraine, and the Ukraine government raised the price of your corn, then your plan to rely on cheap corn from Ukraine is broken.
In light of that, is it a coincidence that just over three weeks after this Ukraine tax went into effect, the decision was made to close the chicken plants?
So my conclusion is that government action did in fact ruin the business plan for chicken plants. The Ukraine government, that is. Clearly, you should call Bev Perdue and David Price and demand that they do something about this!
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