Posted on 02/25/2007 3:13:21 PM PST by Diana in Wisconsin
HERSHEY, PA — If Calvin Smith Jr. is going to lose his job, he’d like to know about it.
Smith and his fellow workers at The Hershey Co. already know the company plans to reduce its workforce by 1,500 jobs during the next three years and eliminate a third of its production lines. And when employees for a new plant to be built in Monterrey, Mexico, are factored in, the actual number of job losses at the company’s U.S. and Canadian plants could total 3,000.
But what Smith and his co-workers don’t know is when the ax will drop.
“Any human being with a soul has a fear of the unknown,” said Smith, who lives in Jonestown and serves as branch president of Local 464 of the Chocolate Workers of America. “We don’t know what our future is...We don’t want the great American chocolate factory to become the great Mexican chocolate factory.”
As workers left Hershey’s plant at 19 E. Chocolate Ave. on a recent workday, they expressed varying degrees of fear and resignation toward the future.
“It’s a sign of the times in America,” one man said.
“Since (Richard) Lenny’s taken over (as company president and CEO), all he does is cut jobs,” a woman said. “That’s not the answer.”
The bogeymen cometh
In Smith’s eyes, there is plenty of blame to spread around for what is happening. Among the bogeymen are the federal government, which has encouraged free trade through the North American Free Trade Agreement; the company’s management; and the Hershey Trust, which has a controlling interest in the company.
David Rudd, chairman of Lebanon Valley College’s Business Department, said Hershey’s decision was inevitable — and probably overdue.
“When you’ve got plants operating at 62 percent capacity (as Lenny reported Tuesday), that’s nonviable in any industry,” Rudd said. “Some of their plants are single-product. Companies just don’t do that. Flexible manufacturing has been the rage for 10 or 15 years.”
By combining plants, “you can have one plant at 92 percent,” he said, noting that most companies try to operate at 85 to 90 percent capacity.
Hershey runs 20 plants: three in Derry Township; three elsewhere in Pennsylvania (Lancaster, Hazleton and Reading); three in Canada; one in Mexico; one in Brazil; and the rest scattered from Connecticut to Hawaii.
Although Hershey’s employees are frustrated by the lack of clarity in the company’s Feb. 16 announcement to reduce its workforce, Rudd said the company was compassionate compared to some others.
When Otis Elevator decided to leave New Haven, Conn., to move its manufacturing to the Caribbean, it did so with no advance warning, he explained.
“Here, people get a chance to adjust,” Rudd said. “It’s more brutal to go to work one day and have someone say, ‘Here are your last two paychecks.’”
We’re No. 43
David N. Taylor, executive director of the Pennsylvania Manufacturers Association, said he’s having difficulty trying to analyze the Hershey situation.
“We don’t know exactly how all this is going to manifest itself,” he said.
Taylor points a finger at the “bizarre and antiquated” U.S. sugar subsidy, which inflates the price of sugar to “two or three times the price on the world market.”
By shifting production to Mexico, Hershey can buy sugar at the world price, which in turn can make its product pricing more competitive with its international competitors, Cadbury-Schweppes of Great Britain and Nestle of Switzerland.
Production costs in Mexico are about 10 percent of those in the United States and Canada, Lenny said. The goal is to increase Hershey’s product volume outside the States and Canada from its current 6 percent to about 20 percent in 2010.
Taylor said Pennsylvania’s overall business climate is “not good.”
While a national manufacturing recession began in 2000 and ended in July 2003, Pennsylvania’s slump has continued, with a net loss of more than 200,000 jobs since July 2000.
“Pennsylvania manufacturers need the state government to wise up,” Taylor said. “Fiscal discipline is the first and most necessary step.”
That means limiting government spending, which has increased 28 percent during Gov. Ed Rendell’s tenure, he said, adding that limits on lawsuit abuse are also needed.
Forbes magazine recently ranked Pennsylvania as the 43rd most business-friendly state.
“Virginia was number one, and North Carolina was number three,” Taylor said. “Those are our competitors. ... We should be asking, ‘When will it be smart for businesses to decide to operate and expand in Pennsylvania?’”
Only rumors
All of the analysis is small comfort to the men and women whose families could be affected by the company’s downsizing.
“The only thing I know is what has been in the paper,” said Bruce Hummel, the business agent for Local 464, which represents 2,500 workers in Hershey and Reading. “We’re hearing rumors. We’re hearing the plant in Canada (Smiths Falls, Ontario) is going to shut down. I really don’t know.”
The reason for the workers’ lack of information is simple, Hummel said. Hershey’s administration “is out for the stockholders.”
The lowest-paid union-scale plant job pays $15.20 an hour, he said. An average wage is $18.78 an hour.
“We have high-paid jobs thanks to the negotiations of the union,” he said. “Reese (nonunion) workers are getting union-scaled wages to keep the union out.”
Although the main plant at 19 E. Chocolate Ave. is the oldest of the company’s 20 plants, it “is held to high standards and produces a quality product,” Hummel said.
Half of Hershey’s 13,000 employees work at the companies’ six Pennsylvania plants (Hershey, West Hershey, Reese, Lancaster, Hazleton and Reading), company spokesman Kirk Saville said.
But, according to one union spokesman, the problem is even closer to home.
“I believe half (of our members), at least half, live in Lebanon County,” said Melvin Myers, president of Local 464 and an employee at the West Hershey plant.
Myers, who lives in Campbelltown, started working at the main plant on East Chocolate Avenue 38 years ago, right after his discharge from the Marine Corps.
“Hershey has not been telling us a lot,” he said. “They have been downsizing some departments a little at a time.”
Battle of attrition
Myers could have retired in November, but he decided to keep working because he has another year left in his term. He plans to run for re-election next year.
“If I win I will stay,” he said. “If I lose, I’ll retire. My joy comes from the union work I do.”
Attrition could play a limited role in force reduction, Hummel explained. Between 40 and 50 workers usually retire each year.
LVC’s Rudd said the line employees won’t be the only ones affected in the event of layoffs.
“It could also be painful for managers,” he said. “As a manager, you know changes are coming way before the other people do. You’re carrying that around in your heart. It’s sort of like cut-down day in the NFL. There’s pain for people in the middle, the middle managers. And some of them are next in line to go.”
Hummel remembered the last great trauma for the company’s employees, when the Wrigley Co. attempted to buy Hershey in 2002.
“Back then we thought the trucks were heading to Chicago,” he said. “Now I guess they’re heading to Mexico.”
And if the bulk of the job cuts come in Dauphin County, Hummel said, “It could be devastating to central Pennsylvania.”
Even so, Rudd said, the region’s economy is “still quite robust.” There is more diversity here than in many places, with agriculture, health care, government, education and transportation among the strong components.
“There are not that many monster employers,” he said. “It’s much more diverse here than in other areas.”
Anxiety and fear
While that is encouraging news, it doesn’t mitigate the immediate wave of fear going through Hershey’s employee ranks.
“We have a lot of people afraid,” said Myers, whose wife, Joyce, has worked for 24 years at 19 E. Chocolate Ave. “They don’t know what to expect. We don’t know how to encourage them or console them. You’re anxious to find something out, but you’re kind of afraid.”
Although Myers understands market forces are at work, “it’s just shocking,” he said. “I never, never thought we would see this day.”
For Smith, this is the second time he is looking at a possible job loss.
“I grew up in Lebanon,” he said. “I worked at Textile Printing on 25th Street for years.”
When that company closed, it led to his career at Hershey, “the best thing that ever happened to me,” Smith said. “Hershey had better benefits and better pay.”
Smith’s wife, Kristi, also works for the company, so they are looking at the potential loss of two jobs.
“There are a lot of families there,” Smith said. “We consider all of the people family up there. We treat them like family. It’s a nice place to work, and I hope we can continue to work there. There are a lot of dedicated people.”
Hershey's is to chocolate what Culver's is to burgers.
You can't tell me they can make a Hershey Bar thinner down there.
The whole Hershey operation should be moved to the Chocolate City. What an advertising campaign and a boost to the Chocolate city economy.
I empathize with you. By-the-way, did you check the See's store on-line. They might still sell that toffee that you so crave. Don't you have See's back there? If you can't get it back there, maybe I can help. There is a See's store nearby. But check on-line first. Keep up the hope, and the good fight!
Thanks for the offer to help. It's easy enough to order online. No, See's seems to be just a west coast phenomenon, I guess. But I think they've not outsourced yet!
Actually Fannie May has an online outlet, too! Most of my favorites, but not the fruit and rum. Oh well. It would be quite a splurge right now.
Bodega Bay has some giant oysters you can order; I bought some when I lived out there. Someday I may treat myself to some of those. And a lobster tail. Haven't had one for years.
All of that sounds good, especially the seafood. I read last night that the Norwegians and British are being over run by giant crabs. Maybe you can find them online and let me know. I was salivating just reading the piece. Draw that butter now! And oysters...I haven't had oysters in years, but would love to! As for lobsters, do you have Red Lobster? It might not be that expensive at lunch. Always go for seafood at lunch. Now, put on that bib and dig into the crab, lobster or anything with drawn butter!
Consumer: "As long as the chocolate is made to the same standards who cares if it comes from Mexico, China, or Timbuktu? All the better if it's cheaper!"
Hershey Employee: "But I don't want to move and live where global warming melts chocolate faster than terrorists can blow a New Orleans dyke."
I just looked her up in the California Death index. She died on August 24, 1964. I think he might have died in 1968. It makes me so sad now. I wish there were something I could do. Maybe I should do some more checking and have flowers put on his grave rather than worrying about candy. Something.
Does anyone else remember the Smothers Brothers' song, "I Fell Into a Vat of Chocolate"?
You have to stop beating yourself up. Regrets don't do any good. Learning from the lessons that life teaches us means acting on them. That father is probably no longer with us as you said, but you can do an act of kindness in his honor, as well as that of his daughter. When you encounter someone who needs a hug, or could use a box of chocolate, then do it in their memory. Start today. But in the meantime, I am sure that he understood that you felt for him. No more beating yourself up. Take care.
I have a poor friend on welfare of one sort or another all her life, and I bought her a box of mint meltaways for Christmas a couple years back just before they announced that Fannie May was moving production to Mexico. I don't know if she ever had a box of nice candy in her life or which ones she would like the best, had a terrible time deciding there at the mall.
But that isn't enough. I'll remember what you said. There is another grave somewhere in Los Angeles, CA I'd like to honor that person, too, maybe they could have been cremated though. I did an ornery thing to her when I was about nine, and I just couldn't shake the guilt of it for most of my life. I tried to make it up to her in my childish way by taking her valentines to her house when she was sick and couldn't come to school. She is all but forgotten except for the CA death index, and I found a completed auction on ebay with an old magazine article about her.
A few other things I can more easily forgive myself for. A couple things would be considered a lot worse in the hierarchy of sins, but there are about probably 7 no 10, it keeps getting bigger! things most people might not think that awful if I could only have another chance . . .well in a way I have, but not the same people.
Well, I've been hurt badly, too, so maybe I paid my dues and then some.
You sound like a very kind person.
You are welcome. Remember those words when you start beating yourself up. There are things that everyone, not just you, has done that we now regret. That is life. But while we can't undo what we have done, we can learn and do better, like the lesson you had with your school mate.
If you think of the things that you have done in the context of the things that you haven't, you will find that you aren't the bad person believe yourself to be. Positiveness is really important. The next time you go to the mall, sit and look at all the people, and know that each of them has done something that they wish they hadn't. Yet they go on. You've paid your dues and then some. So start living today.
You don't sound like a bad person to me. Afterall, you did take the box of chocolates to your poor friend. That is a big clue.
I try to be a kind person. Thank you for the compliment. I'm glad to help. Be well. Take care. Enjoy life!
There is still one Dr. Pepper plant that uses sugar in Dublin, Texas, and I think there's a kosher Coke or something that uses it, but otherwise, it's corn syrup in soft drinks. Cokes haven't tasted the same for quite a few years.
I think they also did a lot of lobbying to get ethanol production mandated by the feds.
When they come here, they get the same horrific symptoms. It has to do with the change in water. They aren't accustomed to ours, we aren't accustomed to theirs.
Geeze. Could these guys whine any worse. I've been in a company that was bought and we were all let go - eventually.
I put out my resume as soon as it was even REMOTELY apparent that an axe was going to fall.
In the eighties my father worked many times as an engineering contractor with a company (Otto Durr), that did business with the Ford company.
Yes, the Ford factory workers were the best paid in Hermosillo. The average pay was $5.00 a day.
However, when shopping in the markets, we noticed that an umbrella cost $5.00
When my mother asked a young man about the daily wage and the expensive umbrellas he told her that the typical Mexican doesn't own an umbrella, no matter if he worked at Ford. Who in their right mind would spend a day's wages on an umbrella?
Tom (singing): I fell into a vat of chocolate. I fell into a vat of chocolate...
Dick (singing): What’d you do when you fell in the chocolate?
Both: La dee doo dum la dee doo dum day...
Tom (singing): I yelled ‘fire’ when I fell into the chocolate...
Dick (annoyed, singing): Why’d you yell ‘fire’ when you fell into the chocolate?
Tom: I yelled ‘fire’ cause no one would help me if I yelled ‘Chocolate!’
Both: La dee doo dum la dee doo dum day.
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