Tyson Foods

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During the Great Depression, Arkansas poultry farmer John Tyson supported his family by selling vegetables and poultry. In 1935, after developing a method for transporting live poultry (he installed a food-and-water trough and nailed small feed cups on a trailer), he bought 500 chickens in Arkansas and sold them in Chicago (Hoovers, 2011). For the next decade Tyson bought, sold, and transported chickens. By 1947, the year he incorporated the company as Tyson Feed & Hatchery, he was raising the chickens himself. He emphasized chicken production, opening his first processing plant in 1958 in Springdale, where he implemented an ice-packing system that allowed the company to send its products greater distances (Hoovers, 2011). John's son Don took over as manager in 1960 and in 1963 it went public as Tyson Foods. Tyson Country Fresh Chicken (packaged chicken that would become the company's mainstay) was introduced in 1967 (Hoovers, 2011). Health-conscious consumers increasingly turned from red meats to poultry during the 1980s. Tyson became the industry leader with several key acquisitions of poultry operations, including the Tastybird division of Valmac (1985), Lane Processing (1986), and Heritage Valley (1986). Its 1989 purchase of Holly Farms added beef and pork processing (Hoovers, 2011). Tyson bought embattled Hudson Foods' poultry operations in 1998. The company said it would take a charge that year of $196 million to restructure. It also sold turkey processor Willow Brook Foods (now part of Cargill Meat Solutions) to Willow Brook management in 1998. That year John H. Tyson, grandson of the founder, was elected chairman. In 1999 Tyson sold its seafood business for about $180 million in a two-part transaction to International Home Foods and Trident Seafoods. John Tyson became CEO in 2000 (Hoovers, 2011). As the winner in a bidding war with Smithfield Foods, in 2001 Tyson agreed to buy IBP, Inc., the #1 beef processor and #2 pork processor in the US, for nearly $3.2 billion. Tyson tried to back away from the table after accounting irregularities were discovered at an IBP subsidiary, but a Delaware judge ordered Tyson to sit down and finish dinner. The deal was made final in September and Tyson changed the beef processor's name to IBP Fresh Meats (Hoovers, 2011). Growing concern over the role of trans-fatty acids (from hydrogenated vegetable oils) in diet and health led Tyson to begin removing them from its processed foods such as breaded chicken nuggets and chicken tenders. The company announced the removal of trans-fats from all its retail poultry and school foodservice products in 2005 (Hoovers, 2011). In 2006, Don's son, John Tyson, stepped down as CEO. President and COO Richard Bond was named president and CEO. Tyson remained as chairman. Soon thereafter, Bond announced $200 million in cost reductions, to include reductions in staff, recruiting, relocation, consulting, sales-related expenses and supplies, and travel. The plan included the elimination of 850 positions, of which 420 were currently held and 430 were positions to be filled. Most of the jobs were managerial and involved no hourly workers at Tyson's plants. Later that year, the company announced it would cut another 770 jobs as it closed and consolidated several meat slaughtering and processing plants in the northwestern United States (Hoovers, 2011). Recognizing the growing market for alternative and renewable fuels and recognizing its unending supply of meat by-products (in this case, such lovelies as fat, tallow, lard, and grease), Tyson decided to get into the alternative fuel market in 2007 with the formation of a 50-50 joint venture with fuel refiner Syntroleum called Dynamic Fuels. The joint venture was set up to explore the possibility of producing synthetic fuel from Tyson's waste products for the diesel-, jet-, and military-fuel markets. In conjunction with this joint venture, Tyson...
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