Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 15, 1992 TAG: 9203130540
SECTION: BUSINESS PAGE: D-5 EDITION: METRO
SOURCE: By KIM CLARK THE BALTIMORE SUN
DATELINE: SALISBURY, MD. LENGTH: Long
James A. Perdue, the little-known son of the famous chicken-hawker Frank Perdue, says he is reforging the family poultry company in his own image.
His father turned a small family egg business into the nation's fourth-largest chicken seller by telling television audiences he was a "tough man" who made "tender chickens."
But Jim Perdue, who took over the chairmanship of Perdue Farms Inc. from his father last July, describes himself as "a tender man."
The younger Perdue intends to follow his father's plan and keep pushing Perdue marigold-yellow-skinned chicken into supermarkets farther west. He is also pursuing new lines of business. Perdue brand poultry soon will be offered to hotels and restaurants, he said.
And maybe, just maybe, Jim Perdue said, he will find a use for his Ph.D. in marine biology by adding fish to the Perdue line.
But to distinguish himself from his father, he also will loosen the reins on managers and workers alike, decentralize power and improve working conditions, he added.
Some people inside and outside the company doubt whether the younger Perdue is really tenderizing a company that continues to face criticism for its treatment of workers, guarantees of product health and handling of chickens.
There is little doubt, however, that the East Coast's premium chicken company will undergo dramatic changes as the elder Perdue hands control of the family-owned company to his only son.
Many in the industry expect the company will have to adjust to slower growth as the boom in Americans' demand for chicken tops out.
And a big marketing problem may loom.
Seventy-one-year-old Frank Perdue still heads the company's policy-making board and still appears in its advertising campaigns. But eventually, the company will have to find some other way to convince the nation's consumers that Perdue chickens are worth a premium of 10 cents a pound as the man they identify with the company, Frank Perdue, reduces his involvement.
As he tours the company's oldest chicken-processing facility, the young Perdue monitors a line of plucked chickens zipping overhead. They are hanging by their feet and doing a sort of mechanized samba toward eviscerating machines.
Jim Perdue said he learned a lot from his father. And that is why he is intent on imposing a new management style on the 12,000-worker company.
"Dad's style was entirely different," he said. His father's style is "autocra . . . " He stopped and corrected himself: "authoritarian."
Instead, Jim Perdue wants to give workers more say in their jobs. The company has invited workers to join committees that try to make jobs safer and easier, he noted.
The younger Perdue also said he does not spend nights on the cot his father installed in the company headquarters.
"I balance my job and family. I kick people out after eight or 10 hours. If they are having problems with their family at home, they are no good to me here. That is one thing I picked up from growing up" a Perdue, he said.
Though he got a master's of business administration degree after he returned to Maryland, he conceded that his extensive academic training didn't really prepare him to run the family company.
"What I really should have done was started a small company and gone bust," he said.
The spectacular growth of the 1970s and 1980s, when Americans' chicken consumption grew 5 percent a year and Perdue Farms Inc. doubled in size every couple of years, probably cannot last, he conceded.
Although the company probably will continue its slow move westward, Jim Perdue said, he is most excited by the potential of new products and businesses. Perdue is about to open up a new chicken-processing facility in Dillon, S.C., that will allow the company to sell to hotels and other food-service operations for the first time, he said.
And, although he insists the company will never get into the fish-farming business, he believes "aquaculture definitely has got a future."
Just as his company processes chickens it buys from growers who raise them according to Perdue specifications, Perdue said that someday the company might work out a similar arrangement with fish growers. "Our expertise is in feed, packaging and distribution. We know the fresh-meat case. We could help there," he said.
But the younger Perdue's rosy view of the company contrasts with workplace and consumer health concerns that nag his company and other poultry producers.
In recent months, hundreds of his chicken growers have joined organizations devoted to addressing what the growers say are industry practices that enrich the company but impoverish them.
Deldon Nelms, who has raised chickens for Perdue in North Carolina for 12 years, said the company is luring new growers into taking out huge loans to build new chicken houses while letting the houses of established chicken growers sit empty for weeks at a time. Perdue requires growers to pay for, build and upgrade their own chicken houses. The company now often does not supply enough chicks for growers to make their mortgage payments, Nelms said.
Also, some plant workers say that although Perdue has started rotating workers into different jobs to prevent repetitive motion injuries and has made a few other changes in chicken-processing plant jobs, the changes have not significantly improved the plight of workers.
In some ways, "it has gotten worse," said Sarah Fields Davis, the head of a North Carolina center that offers screenings for repetitive-motion injuries for workers.
And Tom Devine, head of a Washingon-based watchdog group, said the federal government's gutting of its poultry inspection program has allowed companies such as Perdue to sell chicken contaminated with salmonella bacteria.
Official Department of Agriculture reports have found that at least a third of the raw chicken leaving processing plants for supermarkets carry disease-causing bacteria. Other studies show the danger is even higher, said Devine of the Government Accountability Project, which represents whistleblowers.
Jim Perdue said the growers are suffering from low prices and meager profits today because the entire industry is reeling from its worst downturn in five years.
Perdue is selling its chickens for less than its costs, he said. Perdue continues to advertise for new growers because older chicken houses get outdated and cannot compete, he said.
He dismissed claims of salmonella contamination, saying Department of Agriculture studies show chicken is safe to eat if cooked properly. And, he said, his company is trying to address the worker safety problems by developing new equipment for the toughest jobs. Perdue attracts criticism and adverse publicity stunts because of its high profile, he said.
But his toughest challenge might be to maintain that high profile, which some industry experts say translates into 2 to 3 cents a pound in profit over the current industry average of about a penny a pound.
"We do a lot of consumer research. There is a real bond between Frank Perdue and the consumer," Jim Perdue said.
He said he has not decided how to handle the marketing transition yet.
But he said he might do ads himself. "It is a possibility."
by CNB