From the notebook of business editor Tim Rausch

Bad news persists, but there is one upside

For almost 80 years, customers have trusted Castleberry’s as a high-quality, value-added manufacturer and now so can you. What’s our secret? We strive for perfection.
– Castleberry Food Co.

Major business news breaks every time I leave town on vacation, and it’s rarely good news. My last getaway, less than two weeks ago, happened to coincide with the Castleberry Food Co. recall of 90 types of canned chili, beef stew, corned beef hash and other meat products produced at its downtown Augusta cannery.

 

The facility remains closed while the company and federal regulators investigate four cases of botulism poisoning linked to Castleberry’s hot dog chili. The facility’s 450 employees are, for now, out of work.

The botulism scare is the first major public relations nightmare for the homegrown company, which was founded more than 80 years ago in the same neighborhood it is in today. Castleberry’s has been part of Canadian conglomerate Connors Bros. since Robert Kirby, Castleberry’s former chief executive and largest shareholder, sold the company to Connors subsidiary Bumble Bee Foods LLC in 2004 for $93 million.

If Castleberry’s were still owned by Mr. Kirby & Co. instead of North America’s largest canned seafood company, I believe it might not be able to withstand the mounting losses wrought by the massive recall. The 90 brands pulled from store shelves represent only 3 to 4 percent of Connors Bros. annual revenues.

Al though the recall’s long-term impact remains to be seen, I’m going to go out on a limb and predict that within three months, it will be business as usual at 1621 15th St. There certainly won’t be anything drastic, such as a mass layoff or closure of the facility.

There are dozens of food and drug recalls every year, and consumers usually return to a brand once the problems are resolved. Hey, people still buy Peter Pan peanut butter (salmonella), eat at Jack in the Box restaurants (E. coli) and take Tylenol capsules (cyanide).

I’m betting that by Labor Day, you will have forgotten all about this recall. You will have forgotten that people had ever suspected Clostridium botulinum bacteria was lurking in cans of the nation’s No. 1 selling hot dog chili.

Of course, I could be wrong. The Castleberry’s story is still developing, and things could get worse. I probably shouldn’t take another vacation any time soon.

THAT’S HOW THE COOKIE CRUMBLES: There isn’t much light at the end of the tunnel for another Augusta food producer – Kellogg Co.’s Murray Biscuit operation in south Augusta. Anywhere from 60 to 120 employees will be out of work when the bakery closes its warehouse-distribution center by the end of September.

Nothing is going to happen to the several hundred people who work in the bakery itself, which produces various Murray, Keebler and Kellogg brand snacks, but a change in how the company gets its products to market will eliminate many truck drivers and the people who load their trailers with cases of goodies.

It seems like just yesterday that I was covering the grand opening of the bakery’s $11 million warehouse facility. Seven years later, I can still smell the cookies in the air.

THE HITS JUST KEEP COMIN’: There is one more industrial employer that took a hit in recent weeks – Standard Textile Inc.’s King Mill facility.

Though half of the plant’s 120 employees are going to be out of a job soon, there hasn’t been a whole lot of public outcry.

Why? My theory is that people in Augusta (at least those who don’t wear earplugs or safety glasses to work) probably think we exited the textile industry years ago. After all, it was Augusta’s first industry. More than 150 years ago, the city’s agrarian economy was gradually transformed into a manufacturing one as gigantic mills and factories, such as King Mill, sprouted up along the Augusta Canal.

Today, King Mill’s gothic architecture that once looked like a cathedral of commerce is now an anachronism in a nation where pop culture and the occasional automobile are the top exports.

Although Ohio-based Standard Textile’s decision to move roughly half the plant’s work to a lower-cost facility in a south Georgia is not good news – especially if you’re one of the 60 or so people who will be without a job for a while – in the grand scheme of things, it’s not exactly a tragedy.

In fact, it’s inevitable.

Goods-producing companies profit most by operating in low-cost locations, whether it’s Mexico, China or south Georgia. When costs rise too high, they move to another location. Thus, the remaining 60 jobs at King Mill will be sent somewhere else, too. It might take one year or 10, but it will happen.

It is hoped the Augusta Canal Authority, which owns the building and real estate, is already envisioning what to do with the property when the mill turns off the lights.
With serial renovator Clay Boardman’s recent announcement to buy the shuttered Sibley Mill next door (he expects to close on the deal later this year), and the Salvation Army’s $107 million Kroc Center proposal just across the canal from King, there is a tremendous opportunity to transform that section of upper Broad Street into something other than a graveyard for dying industry.

RANDOM THOUGHT: I was at a civic club meeting last week and one of the club’s members, a Georgia native, mentioned how she had to go out of state to attend optometry school because there are none in state.

Maybe that could be an opportunity for the Medical College of Georgia?

HEARD ON THE STREET: Fancy-schmancy hamburger joint Steak n’ Shake is coming to Columbia County, and bar/grill Somewhere in Augusta is moving from National Hills shopping center to the building being vacated by Doris Diamonds (which is being merged into Windsor Jewelers).
That’s all I’ve got, folks.

OH, ONE OTHER THING: They’re still playing musical chairs over at Clear Channel Radio. The third Augusta market manager in about four months was named last week.

You may recall that Barry Kaye abruptly resigned the job during the spring. He was quickly replaced by Coni Sansom, a former executive for crosstown competitor Beasley Broadcast Group. That arrangement lasted about as long as a Van Halen reunion, which is perhaps why Clear Channel has been fairly quiet in announcing its new market manager, Mark Bass.

They might be waiting to see how long he sticks around before making a lot of hullabaloo.

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willreiddkwg
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willreiddkwg 07/30/07 - 04:21 pm
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Iteresting Note regarding

Iteresting Note regarding Optometry School out of state...students also have to go out of state to become an audiologist and it is now a doctorial program. Maybe the Medical College should look into tht program also. The University of Georgia did away with the audiology program when it changed from a masters program to doctorial.

xqwbv2
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xqwbv2 07/31/07 - 06:55 am
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MCG can do all it wants, but

MCG can do all it wants, but you have to remember that it's controlled, like all other public universities in the state, by the Board of Regents of the University System of Georgia. There are many, many hurdles that MCG would have to go through in order to get BOR approval--and even that's not guaranteed.

galaxygrl
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galaxygrl 08/02/07 - 05:50 pm
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About Castleberry's. I find

About Castleberry's. I find it odd they operated for 80 years without any problems. Only two years in to new ownership and we have food poisoning. Are the checks and balances better or worse since The Tuna company bought them? Wss there cost cutting to improve bottom line? Just a thought.

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