Posted on 04/21/2006 5:20:33 AM PDT by kinghorse
Company's success was 'curious' to competitors Feds think illegal labor key to Houston division's record profits
By ROBERT CROWE Copyright 2006 Houston Chronicle
When Houston-based IFCO Systems North America Inc. reported record profits last year, others in the unglamorous business of recycling wooden pallets couldn't help but wonder how the company did it.
"We were all very curious about this," said Chaille Brindley, assistant publisher of the trade magazine Pallet Enterprise. "They were able to do things that other companies just couldn't do."
Federal investigators think a significant portion of those profits came on the backs of illegal immigrant workers recruited in Houston and bused to at least 26 plants across the country, where they reassembled worn pallets for substandard wages.
And the company may have been able to keep prices low by paying low wages.
"Pallet recycling normally requires a lot of physical labor ... but you can earn a fair living doing that," Brindley said.
Major clients With 53 plants across the country, the nation's largest supplier of recycled pallets has the infrastructure to handle large volumes for its major clients, such as Target, Kmart, Office Depot, Tyson, Rite-Aid and The Home Depot.
The company has stated that pallet recycling last year "contributed overproportionally" to its gross profit of $116.2 million — a nearly 40 percent increase over 2004. In all, the company raked in more than half a billion dollars in revenue.
"Being a national company allows IFCO to offer a complete range of services for pallet management, from supply through recovery, reconditioning and disposal," said Dave Russell, president of IFCO Systems North America, in a December 2005 press release.
"It also has a very low price," Brindley said. "A lot of retailers went because they were able to get that national service at a low price."
The company saysit recycles more than 50 million pallets annually. Some need only a few more nails or some metal clips to shore up loose corners. Most are stripped down to individual wood planks. It's back-breaking work where employees use crowbars to pry apart planks and reassemble them with heavy-duty nail guns.
A typical worker might make $9 to $14 an hour, Brindley added. Though IFCO officials could not be reached for comment Thursday , the family of one Houston employee, an illegal immigrant, said he was making about 25 to 35 cents per pallet, or about $6.50 an hour.
"That's a low number," Brindley said.
A criminal complaint alleges Houstonians James Rice, 36, and Abelino "Lino" Chicas, 40, established a plant in Guilderland, N.Y., with workers they knew to be illegal immigrants.
Neither could be reached for comment on Thursday.
Rice was a new market development and regional general manager in Houston last year. Chicas, a naturalized United States citizen from El Salvador, is the assistant general manager of the west Houston plant.
The criminal complaint states that Rice had accepted a resident alien card for an illegal immigrant — a confidential informant — trying to get a job with the company. The name on the card was not the informant's real name, and the photo did not resemble the informant, the complaint states. After Rice allegedly photocopied the card, he looked at it and stated, "looks like you to me," then advised a bookkeeper to change the informant's name on an employee list to the name on the false identification card.
'Writing on the wall' The allegations surprised Houston employment and immigration attorney Jacob Monty, who tends to sympathize with illegal immigrant workers and the employers who might hire them.
"If these allegations are true, this shows a sheer disregard for identification requirements," Monty said. "Here you see the writing on the wall of playing fast and loose with requirements, and managers are facilitating employment of undocumented workers."
Monty thinks the allegations might have been the work of a few rogue, mid-level managers. Brindley, however, thinks the feds will ultimately try to use employees such as Rice and Chicas to go after executives, none of whom were charged in the complaint.
Though IFCO's parent company is based in Europe — its stock is publicly traded on the German stock exchange — its pallet recycling operations are based in Houston.
Just another cost of doing business, eh?
Better yet just close down any business found to be employing illegal aliens and allow their law abiding competitors to benefit from the additional business.
at least the playing field is levelled and the govt gets a cut of the law breaker's profits.
Unless this doofus, Robert Crowe is prepared to argue that the criminal illegals were dragged kicking and screaming onto buses to perform forced labor, his gratuitous marxist crap has no effect on me.
"On the backs of" is no longer an effective metaphor, unless perhaps I can borrow it for a second and suggest that the company's profits may have been earned "on the backs of' the American taxpayer...
What an empty phrase! No agenda here...
Good find. With a vote, we'd soon find out about the marxist roots of this migration. It's not your father's cuban elite coming to set up shop. It's the opposite. The elite's pushing out the trouble from south of the border.
As for "leveling the playing field" that should not be the Gov't's mission in life. I don't think we need the Gov't any more complicit in benefiting from illegals. What would result would be plenty more illegals with the Gov't skimming the profits off the top by selling "Get out of Jail Free cards".
IFCO just didn't buy themselves the right kind of politicians...er, insurance. ;)
"at least the playing field is levelled and the govt gets a cut of the law breaker's profits."
No, not really. It just provides additional incentives not to get caught. The businesses that we're talking about are unethical, by definition. They should be treated as such, and the fines should be in line with that.
You'd be singing a different tune if you were a competitor that employed American citizens and was run out of business by someone employing, and underpaying illegals.
Something to consider...next time you hear the phrase "jobs Americans won't do" think "jobs Americans won't do don't need doing." It will change the perspective on the debate entirely...
Please note, this (both figures) is above minimum wage in my state. And, this is a job I would do! Course, I'm not willing to move to Houston, I think they have their hands full of visitors!
Envy and Jealousy need to be in the 10 commandments.
Those poor immigrant workers oppressed by capitalism are so oppressed that they are able to buy large homes in my middle class suburb.
And the white and black trash who are still renting and can't even make their SSI check stretch to pay the rent on time are certain that those lousy immigrants are "stealing" jobs that non-immigrants really DO want.
We can't have it both ways. Either these immigrants are profiting from coming here, or they're not. Arguing out of both sides on one's mouth is not very convincing.
Why wouldn't they simply set up a "maquiladora" operation on the Mexico side... I mean they are so close to the border, they could do the same thing legally.
This controversy could boost sales of the next issue of Pallet Enterprise by half a dozen copies or more.
These must be all those jobs that the Nawlins refugees won't do.
Envy is.
"Thou shalt not covet..."
It was *1,187 people* that were arrested in the raids.
What I've been trying to find are the details of a teaser on our local TV station yesterday that I didn't stick around to hear the upshot of - they said after the arrests, all of them went home. The closest thing I've found to that statement is that 6 of the 7 executives arrested here and in New York got out of jail on varying amounts of bond.
I'm positive that at least a few of the illegals themselves who were in a federal detention center here are still there, or were as of yesterday evening, because their mothers and girlfriends were on the news protesting about it, things like their not being allowed to take needed medications into some of the men and stories like that.
Son if you're embarking on an investing career, one word - pallets.
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