Decline of The Company
The 1960s and 1970s were difficult times for meat packing companies. Competition was fierce and the industry had become high volume, low margin. Profitability was hurt by a decline in per capita pork consumption beginning in 1960. By the mid 1970s, Rath’s 50-year-old four-story plant was obsolete. The new model for packing houses called for single-level plants with continually moving automated disassembly lines. In addition, Rath’s workforce was predominantly middle-aged, older than the industry average for packing houses, and thus burdened with higher than average wage and benefit costs.
In 1980, Local 41 of the United Food and Commercial Workers Union which represented most of the labor force, negotiated a plan that, in exchange for wage and benefit concessions from the workers, gave them control of Rath’s board of directors.
The employee-owned Rath operated at a loss in 1981-1983. After a series of further financial setbacks, Rath ceased operations in 1985.
Read more about this topic: Rath Packing Company
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