The Wisconsin State Journal
December 5, 2003
by Karen Rivedal, Higher education reporter
For the first time since 1978, when the trigger was South Africa, the UW Board of Regents has pulled its investments from a company to make a political statement.
On Thursday, the Regents' Business and Finance Committee voted in a closed session to direct its staff to sell off a bond from Tyson Foods worth roughly $200,000 and ban any future investments in the company until further notice. Regents cited Tyson's ongoing labor dispute with workers at the Jefferson plant, now in its 10th month, as the problem.
"People are concerned about the Tyson Foods situation," Regent Eileen Connolly-Keesler said in an interview, noting recent decisions by UW-Madison and UW-Milwaukee to stop carrying the company's products until the strike is settled. "We are just responding to what the students have asked us to look at, and we felt we should divest."
The Tyson bond is part of the UW Trust Funds account, which is made up of unsolicited gifts that are then invested in securities. The fund now has over 800 separate holdings with a total market value of about $254 million, manager Doug Hoerr said.
In a letter directing the sale of the bond, Hoerr said the decision to divest was "part of our efforts in the area of 'socially responsible investing.'"
Last month, students spoke against Tyson's labor practices at the board's annual public forum on investments. The decision to stop serving Tyson foods on the UW-Madison campus was made in August, and was described by university administrators as reflecting consumer preferences rather than being tantamount to taking sides in the dispute.
Records show UW-Madison spent about $110,085 on Tyson products last year, primarily for chicken served by Memorial and South Unions.
This week's decision to divest the bond was explained publicly by Regent Mark Bradley, who chairs the business committee, at Friday's Regents meeting. It did not require a full board vote, because board rules empower the business committee to act on investment matters, staff said. Meeting in closed session on investment matters also is legal, as long as any votes are disclosed publicly.
Bradley described the move as supporting the Madison and Milwaukee campuses and reflecting student wishes. No other Regents at the meeting commented on the decision.
A staff analysis about the proposed action noted that selling the bond now 10 months short of its maturation "essentially" would not cost the trust fund anything. The bond was bought at a premium, Hoerr noted, and will still yield a good annualized return of about 6.72 percent.
"If we want to join in solidarity with our two major campuses to pressure Tyson to settle the current labor dispute, divestment and screening could certainly be undertaken," Hoerr's analysis of the action for committee members said.
Hoerr also said he anticipated that the screen against Tyson investments would be lifted after the strike is settled.
Tyson spokesman Ed Nicholson said he was disappointed that no one from the University of Wisconsin System contacted him for the company's position on the strike. He also defended the company's contract offer - which includes wage, benefit and pension reductions - as fair in tough economic times.
"It was made with the intention of keeping the plant competitive," Nicholson said. "Health-care costs have been soaring. It's a fact of life."