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April Hunt
By April Hunt September 5, 2014

Claim about Perdue's former firm hits mark

Two political newcomers running in a closely watch battle to represent Georgia in the U.S. Senate  share the title CEO.

Democrat Michelle Nunn characterizes herself as a problem solver and consensus builder from her leadership at Points of Light, a nonprofit volunteer group.

Republican David Perdue highlights his tenure as an executive with Fortune 500 firms as the experience needed to tackle free-market problems in Washington.

In her first round of ads, Nunn aims to sharpen that distinction by criticizing her opponent’s experience.

"In Georgia, Perdue’s company closed plants and moved jobs to China," the ad says.

Given the winner of the Senate race will help decide which party will control the Congressional chamber, PolitiFact Georgia decided to drill down on the claim.

To do so, we have to jump back to a time of dial-up Internet and grunge music at the top of the charts.

It was 1992 when Perdue was named a senior vice president for Sara Lee. He told PolitiFact that he was sent to Hong Kong for two years to increase manufacturing and contracts in Asia for the firm.

"I was sent to Asia to open those markets for Sara Lee, and we did," Perdue said. "That was the direction of the company at the time."

Perdue’s effort to open the region for Sara Lee was a success, as was the firm for part of that time.

Sara Lee was founded in 1939 as a food processing and distribution company. Its iconic name came from the 1956 purchase of the Kitchens of Sara Lee, a Chicago bakery known for its cheesecake.

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By the early 1990s, though, Sara Lee had expanded worldwide and into other industries with its purchase of Hanes Corporation and Coach leather goods, among others.

For the first three years of the decade, the company rapidly splurged even more, focusing on foreign firms and other well-known brands such as undergarment maker Playtex,

Investors began to question the company’s broad vision, though. The result was the first of several major restructuring plans and layoffs in 1994, Perdue’s last year with Sara Lee.

The 1994 overhaul eliminated 9,900 jobs worldwide, while "realigning production and distribution facilities throughout the world," according to SEC filings.

Among the casualties were 540 jobs at apparel plants in Cartersville, Milledgeville and Wrightsville. A fourth Georgia plant, in Midway, was also shut down, though the number of jobs lost was not published.

Sara Lee’s annual report from 1994 does not break down how many of its 144,900 employees were domestic or foreign. However, a statement from the company at the time said most of the eliminated jobs were at European operations.

The annual report does note the company’s success in manufacturing and sales in Asia, especially in China, India, Malaysia, Thailand and Hong Kong, now part of China.

"David Perdue says he's the better candidate because he's spent his career in the 'real world,' but at too many stops along the way, he seemed to prosper while the people who worked for him saw their livelihoods taken away," said Nunn spokesman Nathan Click.

By all indications, the outsourcing effort at Sara Lee did have that effect. The company expanded what it made and sold in Asia, at a time when it was closing facilities elsewhere, including in Georgia.

As a senior vice president, Perdue had limited input on that direction.

But he did execute Sara Lee’s effort, which the company lauded in its own annual report to federal regulators.

Nunn’s claim is carefully worded to say Perdue’s company, not the candidate himself, was shutting Georgia plants at a time it was adding jobs in Asia. News reports and company filings back up the claim.

We rate Nunn’s claim True.

Our Sources

Michelle Nunn ad, Real

U.S. Securities and Exchange Commission filings, Sara Lee Corp., 10-K filed July 2, 1994

The Atlanta Journal-Constitution, "David Perdue’s business background looms large in Senate run," Aug. 8, 2014

Investopedia, "Sara Lee Analyst Day Review," September 21, 2010

AP News, "Perdue touts business record in Georgia Senate bid," July 12, 2014

The New York Times, "A Rescue for 3 Georgia plants as Sara Lee exits," Nov. 5, 1994

Chicago Tribune, "Shutdowns," June 22, 1994

Bloomberg Business Week, "Sara Lee isn’t exactly cooking," Jan. 23, 1994

Los Angeles Times, "Sara Lee to lay off 6 percent of its workforce," June 7, 1994

Hoovers, Sara Lee Corporation page, accessed Sept. 2, 2014

Investopedia, "Investor Upside As Sara Lee Downsizes," accessed Aug. 29, 2014

Wall St. Cheat Sheet, "A meaty deal: JBS to acquire Sara Lee," Dec. 10, 2010

Funding Universe, Sara Lee Corporation History, accessed Aug. 28, 2014

Interview with David Perdue, Republican candidate for the U.S. Senate, Aug. 12, 2014

Interview and emails with Nathan Click, spokesman for Michelle Nunn, Democratic candidate for the U.S. Senate, Aug. 15, 2014

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