An article in yesterday's Sun about the strike at the Parks Sausage Co. incorrectly described Parks as the only major meatpacker operating in Baltimore. A table of closed meatpacking plants that accompanied the story incorrectly included Saval Foods Corp. and the White Coffee Pot Commissary, which are still operating in Baltimore.
The Sun regrets the errors.
Managers and striking workers at Parks Sausage Co. agreed yesterday to meet with a federal mediator Monday in an attempt to end a dispute over the company's request for pay cuts and other contract concessions.
Although the move toward resolving the 2-day-old strike by about 100 sausage makers was viewed as a hopeful sign, industry observers said the rift between the two sides lies in fundamental changes in the sausage industry.
Parks, which has asked the workers for a 75-cents-an-hour wage cut and an increase in their share of health insurance costs, said it has lost $4.5 million in the past two years. At the same time, the company said, sales plummeted $8 million, to $20 million, in 1992 because of lower-priced competition.
Parks Chairman and Chief Executive Raymond V. Haysbert Sr. said Monday that the concessions were necessary to the company's survival. "Without some relief, they won't have any jobs," he said.
Members of the United Food and Commercial Workers Local 27, which went out on strike Sunday night, have been working without a contract for six months.
Parks officials could not be reached for comment yesterday because they were stuffing sausages, according to a secretary who answered the phone at Parks headquarters in Park Circle.
But competitors, suppliers and others familiar with the industry said that Parks is being squeezed by the same forces that have driven six other major meatpacking operations out of Baltimore over the past decade.
The company -- the last remaining major meatpacker in Baltimore -- is facing intense competition from lower-cost meat giants, which can pack 15 or 20 different brands of sausages at one plant.
"It is like beer," explained Michael Via, a meat industry analyst for the Richmond, Va.-based regional brokerage firm of Anderson & Strudwick. "There used to be 800 breweries at the time of World War I. Now there are 80, even counting the microbreweries."
Smithfield Foods Inc., which recently closed its Esskay plant in East Baltimore, now packs several lines of meats and sausages at one big plant in Virginia, he said, reaping economies of scale that medium-sized companies like Parks can't achieve.
Parks is also suffering from competition from smaller, nonunion companies that have lower labor costs, others said. New nonunion companies in the South and Midwest are able to underprice older companies such as Parks, begun in 1951.
"We are seeing some wage differentials [between union and nonunion factories] reaching $12 an hour," said Jens Knutson, an economist for the American Meat Institute, a trade group in Washington.
And other local sausage executives said Park is fighting other battles as well.
Demand for sausage has fallen off as consumers seek healthier, low-fat meals. And the costs of doing business in cities continues to grow.
Fritz Gutfleisch, plant manager of the European Kosher Provision Co. sausage plant in East Baltimore, said he's seen demand for his kosher sausages sag over the past five years. "The average consumer is a label-reader now," he said.
Mr. Gutfleisch, who has worked for several of the now-closed Baltimore sausage plants, including Esskay, Goetze's and Hygrade, said those businesses were driven out of the city by a combination of bad management and high costs.
"It is cheaper, tax-wise, to be out of the city," he said.
Picketing strikers said they were hopeful that Parks would not follow other sausage companies out of the city and were encouraged by the planned meeting with a mediator.
Rod Meredith, a 15-year-veteran of the company, said the workers would have agreed to a pay freeze and some other concessions to help the company, but that management was asking for too many givebacks.
"We have no animosity toward Parks Sausage Co. It is a nice place to work."
PACKING IT IN
F: Meatpacking plants that have closed down in Baltimore:
Acme Foods Co. Corkran Hill & Co. Esskay
(Schluderberg-Kurdle Co.) Goetze Co. Mash's Inc. Saval Food Products Inc. White Coffee Pot Commissary