In the wake of employee deaths during the COVID-19 pandemic, should Smithfield Foods invest in technology to automate its meat packing plants?
At the height of the 2020 COVID-19 pandemic, following reports of dozens coronavirus infections among its Sioux Falls, South Dakota, pork-processing employees Smithfield Foods, Inc., the nation's largest hog-processing company, closed the plant “until further notice. Less than one month later, the plant was sanitized and retrofitted to the best of its abilities and reopened. This emergency situation opened the door for Smithfield and other meat processing plants to reevaluate capital expenditures on plant automation and related employee protection investments. Since meat processing was usually a low-margin business, companies were wary of overspending on equipment-- but people were sick and some workers had died. This case explores whether the COVID-19 pandemic should serve as impetus for Smithfield and other leading firms to shift toward a higher-skilled, better paid workforce using sophisticated technology, or whether they should avoid the requisite capital requirements needed to automate and hope instead for a vaccine that would eliminate their concerns about coronavirus infections.
Case ID: 210405
Supplemental Materials: Teaching Note