JBS plants limp back from cyber attack with old-school manual labour

The cyber attack on May 30 forced JBS to shut down all of its beef plants in the US.
The cyber attack on May 30 forced JBS to shut down all of its beef plants in the US.PHOTO: AFP

WASHINGTON (BLOOMBERG) - JBS workers returning to a meat processing plant in Texas on Wednesday (June 2) afternoon have been told to be ready to do things a bit differently than normal: work by hand.

With everything from knife sharpening to production line speed controls relying on automation, coming back from a cyber attack that forced the world's largest meat producer to halt operations across the globe is set to be a bumpy ride. Because the plants are coming back online without some of their systems in service, there will be a lot more manual work than usual.

"There's a lot of automation, there's a lot of reliance on technology," said Mr Wendell Young, head of the United Food and Commercial Workers' (UFCW) local union representing 1,500 members at JBS' beef slaughterhouse in Souderton, Pennsylvania. "You can disconnect some of those wires and switches and run things old-school, but before you do, you want to make sure that everything's running smoothly."

Sunday's cyber attack forced the Brazilian food giant to shut down all of its beef plants in the United States - accounting for almost a quarter of American supplies - and slow pork and poultry production. Slaughtering operations across Australia were halted and at least one Canadian plant was idled.

JBS, which has facilities in 20 countries, also owns Pilgrim's Pride, the second-biggest US chicken producer. The extent of the outages may never be known as JBS did not detail the impact.

JBS did not respond to requests for comment. The company said late on Tuesday that it had made "significant progress" to resolve the attack and would have the "vast majority" of its plants operational by Wednesday.

"Our systems are coming back online and we are not sparing any resources to fight this threat," JBS USA chief executive Andre Nogueira said in a statement on Tuesday.

At least some plants were planning to operate manually, meaning logistical labour like packaging and accounting for cattle would be a challenge, according to workers who asked not to be named because they are not authorised to speak for the company.

There is likely to be "some more manual processes than normal in the early days, until they're sure everything's back up and running properly", Mr Young said.

The road to recovery has proven long for many companies subjected to ransomware attacks. Colonial Pipeline had to shut the largest fuel pipeline in the US for nearly a week last month, causing shortages at filling stations, and some regional supply chains struggled for several weeks.

The attack on JBS and ensuing shutdowns upended agricultural markets and raised concerns about food security as hackers increasingly target critical infrastructure. There are no Department of Agriculture cyber-security regulations or requirements for meat packers, a US official said.

"Certainly this is going to have an impact on the prices of meat," Texas Democratic Representative Henry Cuellar, co-chair of the Congressional Beef Caucus, said in an interview with Bloomberg Radio. Congress needs to address cyber-security threats in part by crafting a "comprehensive" national strategy and provide adequate oversight, he said.

Live cattle futures in Chicago had fallen as much as 3.4 per cent from Friday's close to touch a near five-month low on Tuesday, before rebounding on Wednesday by as much as 2.5 per cent. Pork cutouts slid 0.6 per cent in Chicago, trimming gains since Friday to 2.9 per cent. Shares of JBS fell 1.5 per cent in Sao Paulo.

In Texas, workers returning on Wednesday also had to deal with issues like cattle left in freezers longer than usual, potentially rendering them inedible. Employees also are seeking full confirmation that their personal data housed by JBS was not compromised. The company has said that it is not aware of any evidence that customer, supplier or worker data has been leaked.

At plants in Nebraska, some employees returned on Wednesday, while others will be back on Thursday, according to Mr Eric Reeder, president of UFCW Local 293 in Omaha. He was not yet sure if operations will be at full production.

"Everything is run by the computers," Mr Reeder said. "If they can't access them, they can't run."

By Thursday, an Omaha plant will resume work while one in Pennsylvania will be back to normal status, labour union leaders said. JBS said its Canadian beef facility in Alberta, one of the largest in the country, has resumed production. Workers at the Longford beef processing plant in Australia have been told operations will resume on Friday, according to a spokesman for the Australasian Meat Industry Employees Union in Tasmania.

But operations are resuming and on track for normal capacity in the next couple of days, a union official said.