The long, drawn-out story of Northern Beef Packers will someday make a great case study for business schools or public-policy programs.
The troubled Aberdeen beef processing plant is in bankruptcy today, and a federal trustee has asked a judge to convert it from a reorganization to a liquidation.
An observer might say that the plant failed because "everything that could go wrong did go wrong," but we'd argue that more thorough planning and better capitalization could have avoided the situation that exists today.
The questions in a case study might include:
-- Were people so eager to have a processing plant in Aberdeen that they looked at the plan and projections through rose-colored glasses?
-- How much should state and local governments financially support private business projects, and how much risk should they take?
-- Did managers really think they could open the plant without adequate resources to buy enough livestock to process?
-- Did 69 Korean investors each invest at least $500,000 under the federal EB-5 program in order to secure permanent residency or because it was a sound investment?
We don't know how the Northern Beef Packers bankruptcy will proceed. We hope it ends favorably, with the plant eventually operating profitably for both the investors and livestock suppliers. But we think every economic development official should study the case to avoid the same problems.