Tyson Foods Suspends Iowa Plant Operations Due to Coronavirus
As part of its measures to contain the COVID-19 spread, Tyson Foods, Inc. TSN has suspended operations in its pork plant this week, at the Columbus Junction, Iowa. The company said that this step was taken as more than 24 cases of coronavirus were detected at the facility in Iowa. This is likely to affect the overall production at a juncture where consumer demand is increasing in grocery stores.
Nonetheless, management is making efforts to reduce the impact of supply-chain disruptions, given consumers’ soaring demand. In this regard, the company informed that it will shift the livestock supplies, which were to be delivered to the Columbus Junction plant, to some other pork plants in the area.
The temporary closure of the Iowa pork plant reflects Tyson Foods’ focus on ensuring safety, while the planned shift highlights its commitment toward minimizing business disruptions. Apart from this, the company is taking other measures to maintain safety and cleanliness amid the growing virus scare.
Incidentally, Tyson Foods is implementing high-level deep cleaning and sanitizing at its facilities, which may also require a day of suspension of production. Further, the company is planning to use infrared temperature scanners in some locations. Moreover, as social distancing is the key to contain COVID-19, Tyson Foods is creating dividers between workplaces with an aim to expand space between employees. Additionally, the company is working with federal agencies to obtain personal protective equipment like face covers for workers.
Apart from this, last week Tyson Foods said that it will pay around $60 million as bonuses to its 116,000 frontline employees and Tyson truckers in the United States. The eligible candidates will receive a bonus of $500 during the first week of July, in addition to the other support announced by the company amid the pandemic. The company’s “thank you” bonus is a response to workers’ commitment toward continued production to meet consumers’ demand for groceries in such challenging times.
Well, the fast-spreading coronavirus has not only spiked up the demand for food, but also for other essentials like toilet papers, disinfectants, masks, gloves, packaged water, infant supply medicines, and related staples. As a result of the burgeoning demand, retail behemoths like Walmart WMT, Costco COST, and Dollar Tree DLTR have to restock their shelves faster than usual.
Meanwhile, let’s see how far the aforementioned efforts can help Tyson Foods amid the outbreak. Shares of this Zacks Rank #4 (Sell) company have lost 37% in the past three months compared with the industry’s decline of 24%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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