Farmer Brothers leaving the state, in bitter blow to family of workers

Farmer Brothers coffee tells employees it's closing the plant and moving to a lower-cost state

Farmer Brothers, the iconic coffee company based on the border of Torrance and Los Angeles, likes to market a sweet story about how it came to be.

In 1912, Roy E. Farmer thought restaurants should be serving a better cup of coffee, so he started a bean delivery business in the back of his brother's bicycle shop. And from those humble beginnings, the business became a national success, with Farmer later handing the reins to his son.

It's a nice narrative, but the company whose five stated principles include "treat our employees as a Farmer Brothers Family," informed 350 of them last week that they are about to get the ax.

This is yet another blow to middle-class wages in Southern California and Farmer Brothers employees will have a hard time matching the $40,000 to $80,000 jobs they are about to lose.

Far be it for me to question the wisdom of (pun alert) Farmer Brothers' bean counters. This could well be a smart business move, but that's not going to keep me from doing a little roasting here.

The company sent me statements saying that this is part of a turnaround plan that follows disappointing growth. Rather than modernize the plant where it's been for 65 years, Farmer intends to build a new plant closer to its national customer base "in a low-cost state, whether it be Oklahoma or Texas," and expects to save $12 million to $15 million.

So what does that mean, exactly?

We have all heard it a million times — California and Los Angeles have bad reputations in the business world for taxes and red tape. I think some of that is deserved and some of it is hyped, especially when you consider that for decades corporations have reaped a windfall by exploiting Proposition 13.

But by "low-cost state" does Farmer Brothers mean it's abandoning its roots and stiffing its "family" of employees for a lower tax rate? I can answer that one myself — "duhhhhh."

Here are a couple I can't answer yet.

Does it mean those "low-cost states" might be offering giveaways covered by their taxpayers?

And does it mean Farmer is trying to dump union wages and benefits at the local plant and boost profits by whacking personnel costs somewhere else, even as CEO Michael Keown knocked down a $688,748 bonus in 2014 and rang up $1.6 million in total compensation?

A company PR rep told me that "for competitive reasons it's not appropriate to break down costs...."

Of course not.

Farmer said the layoffs will begin this summer and extend into 2016, when the plant shuts down and the company tries to sell it off, possibly maintaining a distribution center somewhere around here.

Surely there's no easy way to deliver such devastating news to employees, but at least one longtime clock puncher said the unexpected summoning of employees Thursday morning, and quick delivery of the heartbreaking news, left a taste far worse than bitter coffee.

"The way they did it was brutal," said the employee. "Then they sent everybody home [for the day] ... and there was security everywhere making sure we got in our cars and drove away."

Some of the employees are still in shock.

"We just don't know what to do," the wife of one Farmer employee told me Monday evening. "We're still trying to process it."

I know from meeting with laid-off Boeing employees the last few weeks that the outlook for middle-aged job seekers is brutal. The economy is strong in some sectors, but without special skills or a couple of diplomas from the right places, a wage that can comfortably support a family is increasingly rare.

"I don't know what I'm going to do, but I guess I've gotta start looking for another job," one employee told me. "It was like family in that place. There were lifetime employees and even second-generation employees, some of whom met there and got married."

I should note here that there's a reason I'm not using the names of employees. When I visited the plant Monday, I couldn't get past the receptionist, who told me to call Farmer's PR company. And when I tried reaching employees by phone, most were too nervous to talk.

I asked Teamsters Local 630 to make some connections for me, but the union was useless. A business agent said that employees were afraid to talk for fear of losing their jobs immediately, and that the Teamsters would have no comment either.

Are these really Teamsters? They just lost 350 jobs and not a peep out of them?

The corporate culture of hiding behind flacks, intimidating employees and following them out of the building with security guards is reprehensible and cowardly. Who would have thought that instead of coming out swinging, the Teamsters would play company patsy?

Speaking of stepping up, did local officials miss a chance to try to talk Farmer Brothers out of moving?

I'm not saying it would have been easy to do so, given the so-called lousy business climate I referred to.

"Companies that have business here and in other states talk about how they can get all the permits they needed for $2,000 in two months, and they can build it and away they go," said Gary Toebben of the Los Angeles Area Chamber of Commerce. "There are more regulations in California and typically in our cities than there are in other states."

For sure, the city and state need to get mad as hell when companies threaten to leave. They should take a machete to some of the red tape they have created, and offer more incentives for businesses to stay. But they can't let the companies mug them in the process. If City Hall offers a break on DWP bills or the business tax to keeps jobs here, then fine, but only if it keeps the money flowing and serves the greater good.

That conversation apparently never happened with Farmer Brothers, which oddly enough announced its planned departure to Torrance city officials rather than to officials in Los Angeles. Torrance passed the news along and Councilman Joe Buscaino's staff reached out to the company, saying that the city's business retention team would gladly try to work out a deal.

I wouldn't bet on a change of heart. Business is business, and it's not about people, it's always about the bottom line. When I asked the Farmer PR rep about the layoff announcement and early dismissal of employees last week, as well as the presence of security guards, I got this response:

"We gave plant employees the rest of Thursday and all day Friday off paid and had extra help to coordinate the large simultaneous outflux of employees for the day. Additionally, the extra security helped ensure the safety of all our employees."

Don't you mean all your family members?

steve.lopez@latimes.com

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