Tyson Foods

Tyson Foods, Inc.

Type	Public
Traded as	NYSE: TSN S&P 500 Component
Industry	Food processing
Founded	1935
Headquarters	Springdale, Arkansas, U.S.
Key people	Tom Hayes (CEO)
Products	Meat
Revenue	US$ 41.373 billion (2015) [1] US$ 37.580 billion (2014) [1]
Operating income	US$ 2.169 billion (2015) [1] US$ 1.430 billion (2014) [1]
Net income	US$ 1.220 billion (2015) [1] US$ 864.0 million (2014) [1]
Total assets	US$ 23.004 billion (2015) [1] US$ 23.956 billion (2014) [1]
Total equity	US$ 9.706 billion (2015) [1] US$ 8.904 billion (2014) [1]
Number of employees	113,000[1]
Subsidiaries	Hillshire Brands
Website	tysonfoods.com

Tyson Foods, Inc. (NYSE: TSN) is an American multinational corporation based in Springdale, Arkansas, that operates in the food industry. The company is the world's second largest processor and marketer of chicken, beef, and pork after JBS S.A. and annually exports the largest percentage of beef out of the United States. Together with its subsidiaries it operates major food brands, including Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright Brand, Aidells, and State Fair.^[2]

Profile

The company was established by John W. Tyson in 1935,^[3] and benefitted during World War II when chicken was not included in foods that were rationed.^[4] As of 2014, the company employs 115,000 people, who work at more than 300 facilities, 90 of which are in the US.^[3] Tyson had about 97,000 employees in 27 states; locations are concentrated in the Midwest, with 16 locations in Arkansas, 11 in Texas, 9 in Iowa, and the remainder of the mostly eastern US with less than 3-4 locations.^[3] Tyson also works with 6,729 independent contract chicken growers.

Tyson is one of the largest U.S. marketers of value-added chicken, beef and pork to retail grocers, broad line foodservice distributors and national fast food and full service restaurant chains; fresh beef and pork; frozen and fully cooked chicken, beef and pork products; case-ready beef and pork; supermarket deli chicken products; meat toppings for the pizza industry and retail frozen pizza; club store chicken, beef and pork; ground beef and flour tortillas. It supplies Yum! Brands chains that use chicken, including KFC and Taco Bell, as well as McDonald's, Burger King, Wendy's, Wal-Mart, Kroger, IGA, Beef O'Brady's, small restaurant businesses, and prisons.

The company makes a wide variety of animal-based and prepared products at its 123 food processing plants. It produces many different products, including Buffalo wings, boneless Buffalo wings, chicken nuggets and tenders. Every week, its 54 chicken plants, 13 beef plants, and six pork plants slaughter and package 42.5 million chickens, 170,938 cattle, and 347,891 pigs. Their largest meat packing facility is their beef production plant in Dakota City, Nebraska. Other plants include feed mills, hatcheries, farms and tanneries.

Acquisitions

The Tyson logo, used as a corporate logo from 1978 to 2017. It has been seen with minor changes since 1972. It continues to be used as a logo on Tyson brand products.

In 2001, Tyson Foods acquired IBP, Inc., the largest beef packer and number two pork processor in the U.S., for US$3.2 billion in cash and stock. Tyson has also acquired such companies as Hudson Foods Company, Garrett poultry, Washington Creamery, Franz Foods, Prospect Farms, Krispy Kitchens, Ocoma Foods, Cassady Broiler, Vantress Pedigree, Wilson Foods, Honeybear Foods, Mexican Original, Valmac Industries, Heritage Valley, Lane Poultry, Cobb-Vantress, Holly Farms, Wright Brand Foods, Inc. and Don Julio Foods. It also acquired along with its purchase of IBP, the naming rights to an event center in Sioux City, Iowa. On 29 May 2014, the company announced a $6.13 billion cash offer to acquire all the shares in Hillshire Brands, two days after a $6.4 billion cash and shares bid for Hillshire by Pilgrim's Corp. In June 2014, Tyson won the bidding war against Pilgrim's Pride, agreeing to buy the maker of Jimmy Dean sausage and Ball Park hot dogs for $8.5 billion.^[5] On July 28, 2014, the company said it would sell its Mexican and Brazilian poultry businesses to JBS S.A. for $575 million and use the proceeds to pay down debt from its pending $7.7 billion purchase of Hillshire Brands Co.^[6]

Tyson Renewable Energy

Tyson's processing plants are left with a vast supply of animal fats. In late 2006, the company created a business unit called Tyson Renewable Energy to examine ways to commercialize use of this leftover material by converting it into biofuels.^[7] The unit is also examining the potential use of poultry litter to generate energy and other products.^[8] On April 16, 2007, Tyson announced a joint venture with ConocoPhillips to produce roughly 175 million gallons of biodiesel a year—enough to run Tyson Foods' truck fleet for 3.5 years.^[9]

Corporate charity

Since 2000, Tyson Foods has given more than 78 million pounds of its products to hunger and disaster relief in the United States - altogether enough protein to have served one meal to every American citizen.^[10] Tyson has donated millions of dollars in cash to help non-profit organizations across the country. For these efforts, Forbes named Tyson Foods the second most proportionally generous company for its donations in 2007 totaling 1.6 percent ($8 million) of its annual operating income.^[11] Tyson initiated the KNOW Hunger campaign in early 2011 to raise awareness of hunger in the United States.^[10] After the Joplin tornado of 2011, Tyson sent 77,000 pounds of food to the city.^[12] It also sent 100,000 pounds of food to the communities along the Gulf of Mexico after the oil spill.^[13]

Religious activities

Current chairman John Tyson is a practicing Interfaith Christian. In addition to placing 128 part-time chaplains (including both Protestant and Catholic Christians and Muslim Imams) in 78 Tyson plants,^[14] in 2006, the company invited their customers to download a prayer book, containing prayers from many faiths, including Christianity, Judaism, Islam, and American Indian spirituality, from the company's website to read during mealtime.^[15][16]

Corporate governance

Board of Directors

• John H. Tyson^[17]
• Gaurdie E. Banister, Jr^[17]
• Mike Beebe^[17]
• Mikel A. Durham^[17]
• Kevin M. McNamara^[17]
• Brad T. Sauer^[17]
• Donnie Smith^[17]
• Robert C. Thurber^[17]
• Barbara A. Tyson^[17]

CEOs

Richard L. Bond had been CEO of the company until January 7, 2009, when he stepped down and his position filled by temporary replacement Leland Tollett. Donnie Smith served as CEO from November 2009 to 2016. In November 2016, the company announced Smith would step down at the end of the year and would be succeeded by company president Tom Hayes.^[18]

Controversies

World headquarters of Tyson Foods at 2200 Don Tyson Pkwy, Springdale, Arkansas

Environmental record

Tyson has been involved in several lawsuits related to air and water pollution. In June 2003, the company admitted to illegally dumping untreated wastewater from its poultry processing plant near Sedalia, Missouri, pleading guilty to 20 felony violations of the federal Clean Water Act. As part of the plea agreement, the company agreed to pay $7.5 million in fines, hire an outside consultant to perform an environmental audit, and institute an "enhanced environmental management system" at the Sedalia plant. At the same time, Tyson also settled a case filed by the Missouri attorney general's office related to the same illegal dumping.

The United States Environmental Protection Agency began the investigation into the discharges in 1997, and federal officials served two criminal search warrants at the plant in 1999. According to EPA and U.S. Department of Justice officials, Tyson continued to illegally dump wastewater after the search warrants were executed, prompting an EPA senior trial attorney to remark that: "Having done this work for nearly 20 years, I don't recall any case where violations continued after the execution of two search warrants. That's stunning." Under the federal and state plea agreements, Tyson agreed to pay $5.5 million to the federal government, $1 million to the Pettis County School Fund and $1 million to the Missouri Natural Resources Protection Fund to help remedy the damage.^[19]

In 2002, three residents of Western Kentucky, together with the Sierra Club, filed a lawsuit concerning the discharge of dangerous quantities of ammonia from Tyson's Western Kentucky factories. Tyson settled the suit in January 2005, agreeing to spend $500,000 to mitigate and monitor the ammonia levels.^[20]

In 2004, Tyson was one of six poultry companies to pay a $7.3 million settlement fee to the city of Tulsa, Oklahoma, to settle charges that the use of chicken waste as fertilizer had created phosphorus pollution in Tulsa's main drinking water sources.^[21]

Employment of undocumented immigrants

In 2001, Tyson was charged with conspiracy to smuggle undocumented workers to work on its production lines. Tyson plant managers arranged for delivery of illegal workers with undercover immigration officials. Prosecutors alleged that the conspiracy to import workers dates back to 1994 when plant managers began to find it difficult to fill positions with "cheap legal help". Of the six managers who were indicted, two accepted plea bargain deals, and one committed suicide one month after being charged. In March 2003, a federal jury acquitted Tyson of having knowingly hired illegal immigrants.^[22][23]

In May 2006, Tyson suspended operations at nine plants during a nationwide day of immigration demonstrations citing expected lack of workers.^[24]

In October 2006, a federal judge granted class-action status to a lawsuit brought by Tyson employees who allege that Tyson's practice of hiring illegal immigrants depresses wages 10–30%. The suit further contends that the company violated federal racketeering laws by conspiring with National Council of La Raza and League of United Latin American Countries not to question the employment applications of anyone with a Hispanic surname.^[25][26][27]

Price manipulation

In 2004 a federal jury found that Tyson Fresh Meats had used captive supply agreements to artificially lower fed cattle prices in violation of the Packers and Stockyards Act. Damages were found to be $1.28 billion. A U.S. Court of Appeals voided the verdict because it determined Tyson had a legitimate business justification to artificially lower cattle prices.^[28]

Undisclosed use of antibiotics

In 2007, Tyson began labeling and advertising its chicken products as "Raised without Antibiotics." After being advised by the USDA that Tyson's use of protozoa-killing ionophores in unhatched eggs constituted antibiotic use, Tyson and the USDA compromised on rewording Tyson's slogan as "raised without antibiotics that impact antibiotic resistance in humans." Tyson competitors Perdue Farms and Sanderson Farms sued claiming that Tyson's claim violated truth-in-advertising/labeling standards. In May 2008, a federal judge ordered Tyson to stop using the label.

In June 2008, USDA inspectors discovered that Tyson had also been using gentamicin, an antibiotic, in eggs. USDA Undersecretary for Food Safety Richard Raymond claimed that the company hid the use of this antibiotic from federal inspectors claiming that the use of this chemical is standard industry practice. Tyson agreed to voluntarily remove its "raised without antibiotics" label in future packaging and advertising.^[29]

Employee abuse

An Oxfam report issued in 2016, cited anonymous employees who stated they have been denied bathroom breaks so frequently that they have started wearing adult diapers to work. According to the report:^[30]

"Workers struggle to cope with this denial of a basic human need. They urinate and defecate while standing on the line; they wear diapers to work; they restrict intake of liquids and fluids to dangerous degrees; they endure pain and discomfort while they worry about their health and job security.

Animal abuse

From December 2004 through February 2005, an undercover investigator for People for the Ethical Treatment of Animals claimed to have worked on the slaughter line of a Tyson Foods chicken processing plant in Heflin, Alabama. Using a hidden camera, he allegedly documented the treatment of the more than 100,000 chickens killed every day in the plant. PETA alleges that workers were instructed to rip the heads off of birds who missed the throat-cutting machines. He claims he saw birds scalded alive in the feather removal tank, and he said that managers said that it was acceptable to scald 40 birds alive per shift. The investigator claims plant employees were also seen throwing around dead birds just for fun. PETA has asked Tyson to implement controlled atmosphere killing (CAK). For this reason, PETA is boycotting businesses that use Tyson as a supplier, such as KFC and distribution channels such as Sunset Strips. The video, taken by the investigator of the killings, was posted on YouTube.^[31]

In 2006, Tyson completed a study to determine whether CAK, which uses gas to render chickens unconscious before slaughter, could be a more humane practice than conventional electrical stunning. According to Bill Lovette, Tyson's senior group vice president of poultry and prepared foods, the study found no difference between the humaneness of the two methods. The company plans to ask scientists at the University of Arkansas to initiate a similar study to test these initial results. The research will be led by the newly created Chair in Food Animal Wellbeing at the Dale Bumpers College of Agricultural, Food and Life Sciences of the University of Arkansas. Tyson has committed $1.5 million to help establish the Chair, which will be involved in overseeing research and classes focused on the humane management and treatment of food animals.^[32]

A 2016 undercover investigation by the animal rights organization Compassion Over Killing, showed workers at four separate Tyson processing plants throwing, punching and kicking chickens as well as sticking plastic rods through their beaks. They also wrung birds' necks, ran over them with forklifts and left injured birds in heaping piles to die.^[33]

See also

• Chicken patty
• Food industry
• Food, Inc.
• Broiler industry

References

External links

• Consumer web site for Tyson Foods
• Corporate web site for Tyson Foods

• • Business data for Tyson Foods: Google Finance
  • Yahoo! Finance
  • Reuters
  • SEC filings

Coordinates: 36°09′13.70″N 94°09′15.49″W / 36.1538056°N 94.1543028°W / 36.1538056; -94.1543028