April 18, 2007 in Business

Meltdown at Hershey

Associated Press The Spokesman-Review
 

HERSHEY, Pa. — The chairman and chief executive of The Hershey Co. faced shareholders for the first time Tuesday since announcing hometown job cuts and a major overseas expansion, and insisted to a divided audience that he was doing the right thing for the company.

More than a thousand people attended the annual meeting of the nation’s largest candymaker, and a few took the microphone during a question-and-answer session to vent anger over what they say is the opposite path founder Milton S. Hershey would have taken.

But Richard H. Lenny, the first Hershey Co. chief executive hired from outside the century-old company, did not apologize or back down, and even received applause after he maintained that his chief responsibility is to keep the company competitive.

“Like it or not, that’s the job,” Lenny said, adding that, “We are making decisions that we believe are in the best interests of the company.”

He also pointed to a March 30 union vote to overwhelmingly approve the elimination of up to 650 jobs at two of the company’s hometown factories.

Since the Feb. 15 announcement of the restructuring, the company’s share price has risen almost 6 percent.

Few shareholders questioned the wisdom of the company’s overseas ventures, but many wondered why it has to cut back in Hershey and whether the quality of candy produced elsewhere will slide.

Hershey is planning to build a new plant in Monterrey, Mexico, and has announced joint ventures to make its candy in India and China. Hershey also said it will close a plant in Smiths Falls, Ontario.

Hershey’s chief operating officer, David J. West, told the audience that the company over time had accumulated a fleet of plants that were too inflexible or redundant.


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