Tyson Foods Ramps Up Meat-Plant Automation Plans

“Its very simple approach here is to take away the more difficult, higher turnover jobs,” Chief Executive Donnie King said on a call with investors, referring to the automation effort. Workers whose jobs are automated can be moved into other positions, he said.

“We have open front-line roles, many of which are harder to fill,” he said.

Tyson, the biggest U.S. chicken producer, and other meat suppliers are under pressure to fill escalating orders from restaurants, which this year have been reopening pandemic-closed dining rooms. Consumers, meanwhile, continue to spend heavily at grocery chains.

The company said it expects to save about $450 million by the end of its 2024 fiscal year from reduced labor costs and increased production from its automation plans, Mr. King said on the call.

“Automation will help us increase volumes, improve reliability and reduce cost over the mid- to long term,” Mr. King said. “We plan to use automation to reduce the number of hard-to-fill roles.”

The automation spending comes as part of a larger program to drive up Tyson’s production capabilities that it hopes will save it more than $1 billion by the end of its 2024 fiscal year, the company said. It plans to open 12 new plants over the next two years, increasing its overall production capacity by about 1.3 billion pounds, it said.

Tyson has spent hundreds of millions of dollars over the past few years developing robotic meat-processing systems, aiming to automate tasks such as deboning chickens and reduce worker turnover in plants. Deboning meat can be labor-intensive work, as workers using knives and saws work on carcasses moving steadily down production lines.

Covid-19 spread rapidly last year among meat-plant workers, deepening the industry’s long-running difficulties keeping plants fully staffed. Over the summer, Tyson, which produces about one-fifth of the country’s poultry, said 15% to 20% of plant workers weren’t showing up on a typical workday, because of child-care needs and coronavirus-related concerns.

Increasing wages and adding new benefits, such as the company’s recent introduction of a sick-leave policy for plant workers, have helped improve staffing, Tyson executives said. In response to higher wages and other rising costs, Tyson has said it is charging food service and retail customers more for their meat and grocery products.

Tyson’s revenue grew by 12% to $12.8 billion in the company’s fiscal fourth quarter, while earnings climbed to $1.36 billion, more than doubling from the same period last year.

Tyson has said it invested more than $500 million in wage increases and bonuses for its front-line employees this past year. The company said earlier this week it plans to pay out $50 million in bonuses to front-line and hourly employees starting this month, with eligible U.S. workers receiving checks ranging from $300 to $700.

Write to Patrick Thomas at [email protected]