Baltimore Mayor William Donald Schaefer said yesterday that Esskay, the 126-year-old meatpacking plant, let city officials down by not telling them in advance of the company's pending sale to Smithfield Foods of Virginia.
City and Maryland officials had hammered out a financial aid package earlier this year, and workers had agreed to wage concessions to keep the financially beleaguered firm from moving from Baltimore to Indianapolis.
"As much as the city has put in an effort to retain Esskay, it really is unfair we weren't at least given the courtesy of notification," Schaefer said.
The directors of Esskay -- the short name for Schluderberg-Kurdle Co. Inc. -- announced tentative plans Tuesday to sell the company to Arlington-based Smithfield in a transaction valued at about $1.9 million.
"I felt let down by the ownership of Esskay not telling the city what was transpiring," said Schaefer. "They should have told us Esskay was for sale. I do not think the firm acted in the very best faith."
Bernie Berkowitz, head of Baltimore Economic Development Corp., who had worked closely with the firm to arrange a financing package that would allow Esskay to stay in Baltimore, said he had "no inkling this was happening."
"The first time I learned of it was when I was called by a reporter at home last night," Berkowitz said. "I don't know any details of Esskay's plans except that an Esskay official told me today that the deal with Smithfield was highly likely."
Esskay officials refused to answer questions about whether Smithfield will retain the Esskay facility as a processing plant or how the acquisition would affect its 520 union workers and more than 100 nonunion managerial personnel.
"There seems to be a veil of secrecy," said Schaefer. "We simply don't know what the plans of the new company are."
The meatpacking plant laid off about 40 employes Friday, and sources close to the company said last night that about 29 more will be laid off this week and that more will be fired by October.
A joint announcement by the owners of Esskay and Smithfield Foods said only that Smithfield intends to keep a "substantial part" of the operation in the Baltimore area and to keep marketing the Esskay brand.
Schaefer said, however, that "substantial" might mean anywhere from one to 500 jobs. In the past, Esskay had said it might move its production operation out of Baltimore and leave only a distribution center there, Schaefer added.
Although Esskay workers also expressed surprise at the company's announcement, their union representatives said it might be beneficial.
Under the agreement, Esskay will give 40,000 shares of voting common stock to Smithfield for $20 a share in cash, and 60,000 shares of nonvoting common stock currently outstanding for $18 a share in cash.