February 16, 2007 in Business

Bittersweet decision

Associated Press The Spokesman-Review
Associated Press photo

The smokestacks of the Hershey chocolate plant are seen in Hershey, Pa., along with a street lamp shaped like a Hershey’s Kiss, on Thursday. The company is cutting 1,500 jobs over three years as part of a plan to scale back production lines and move some manufacturing to Mexico, the candy maker announced Thursday.
(Full-size photo)

HARRISBURG, Pa. — Hershey Co. is cutting its work force by 1,500 and is building a new factory in Mexico as part of a three-year plan to scale back its production lines, the nation’s biggest candy maker announced Thursday.

The announcement came only a day after Valentine’s Day, one of the most popular days of the year for gifts of chocolate and other sweets.

The maker of Hershey’s Kisses, Reese’s Peanut Butter Cups and Mounds bars currently employs about 13,000 workers, so the planned cuts would amount to 11.5 percent of its work force.

When the restructuring plan is complete, Hershey will make its chocolates and other candies at fewer facilities and have a lower overall cost structure.

About 80 percent of Hershey’s manufacturing will take place in the U.S. and Canada, but a union leader suggested the job cuts would be particularly acute in those countries.

Dennis Bomberger, business manager for Chocolate Workers Local 464, which represents 2,500 workers at Hershey plants in Hershey and Reading, speculated that the actual job cuts could have to be deeper in order to achieve a net reduction of 1,500 at the company’s 20 plants.

“They’re going to gain some jobs in Mexico … so there’s going to be a higher number lost” in the U.S. and Canada, Bomberger said. “Whenever they move something out the country, that’s not good news for any company from the workers’ standpoint.”

Hershey spokesman Kirk Saville declined to discuss any details about the job cuts or the plant Hershey plans to build in Monterrey, Mexico.

“We will communicate with our employees and our union representatives,” he said.

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