The major issue is whether one should want Chinese-style management in charge of U.S. corporations, given their record on safety.
Del. Bob Marshall, a conservative Republican from Prince William County, is sounding alarm bells. He wrote in letter to Smithfield brass that: “China’s widespread food safety problems are known to American consumers and will engulf Smithfield Foods regardless of the names under which they are sold.”
Marshall points to concerns about the safety record of Shuanghui International, which wants Smithfield. In his letter, Marshall cited press accounts reporting that the firm bought pigs in 2011 that contained clenbuterol, an additive that was banned in 2002, and that ribs and sausage the firm sold last year were contaminated.
The takeover, which still needs approval from U.S. regulators, took a hit when a few days after its announcement when at least 119 people were killed in a fire at a poultry slaughterhouse in Northern China. According to the Wall Street Journal, workers told Chinese media that factory doors were usually locked, a common workplace practice in that country.
In the past two years, some 70,000 Chinese have lost their lives in industrial accidents, the Journal noted – a record that make any reasonable person think twice.
To be sure, U.S. firms have had their troubles, too, including some in Virginia. And according to the Journal, U.S. firms operating in China may tend to adapt to local practices.
Shuanhui officials say they want to “learn” about safer practices from Smithfield. And there certainly could be a case that Western involvement may help the Chinese to modernize. Coal mine deaths there in 2012 dropped to about 1,300, a decrease of nearly 30 percent. Last year, 19 American coal miners died.
But the problem with the Smithfield takeover – if the Chinese executives are to be believed – is that it puts the cart before the horse. If the Chinese own Smithfield, their practices and cultural will prevail, no matter how bright a picture they want to paint. Soon, the free-traders will have to give that some thought about that before digging into a plate of hot sausage or bacon.