The announcement earlier this week that J&B Group would shutter and sell its meat-processing plant in Pipestone, Minn., caught Mayor Myron Koets by surprise. Now he and other civic leaders are mobilizing to support the 145 employees who worked there.
"The question we're grappling with is how do we keep people in the community so they don't move away," Koets said. "It has a substantial ripple effect."
J&B Group plans to close down the plant in late November or early December and consolidate operations at its headquarters facility in St. Michael, Minn., about 190 miles away.
Workers can apply for positions in St. Michael, which will expand to a seven-day operation to absorb the work from Pipestone, the company said Thursday.
J&B Group is a family-owned company that runs manufacturing operations, freight logistics and wholesale distribution of meat, poultry and deli products in the Upper Midwest.
The Pipestone plant produced fresh and frozen ground beef as well as steaks, including the No Name brand, which will be handled by a co-packer.
J&B will discontinue the manufacture of chuck fillet, ranch and flat iron steaks.
J&B President Chuck Weum said in a statement the move allows the company to gain efficiencies and capitalize on growth opportunities. It bought the 53,000-square-foot facility in 2007.
"The decision to sell the Pipestone facility is a result of a number of factors: a change in the product portfolio, the investment of $7.2 million in anticipation of a new business that did not materialize and our desire to invest in infrastructure at the St. Michael facility," he said.
Along with career counseling and relocation assistance, J&B Group said it would provide severance pay commensurate with years of service and maintain company-paid health insurance into January.
J&B Group was the fifth-largest employer in Pipestone, a city of 4,000 in the southwestern corner of the state near the South Dakota and Iowa boarders.
Koets said J&B was a generous corporate citizen, supportive of the local food shelf and other community organizations. He's hoping a buyer will see the city's potential, noting that the plant qualifies as an Opportunity Zone, a program established by the Tax Cut and Jobs Act of 2017 to encourage long-term investments in low-income and urban communities across the nation.
"You always look for a silver lining," Koets said. "For a prospective buyer, there are significant tax advantages. It's worth taking a look."
Jackie Crosby • 612-673-7335 Twitter: @JackieCrosby