Posted on 06/01/2002 4:25:00 PM PDT by FourPeas
Manufacturer says high cost of sugar in U.S. prompted exit
Several hundred workers at the Lifesavers candy plant in Holland, Michigan are losing their jobs, as the company moves production to Canada. NBC’s Kevin Tibbles reports.
HOLLAND, Mich., May 31 — Sometimes steps taken to protect American jobs, however well intentioned, may in fact have exactly the opposite result. Several hundred workers at a Michigan plant that makes Lifesavers candy are losing their jobs — because the company is moving production out of the United States. It is a very sour ending, for an all-American city.
THEY’RE CALLING it death by sugar. After 35 years, the American candy icon, Lifesavers, is closing its plant in Holland, Mich. Some 600 jobs will be gone by next year.
“That’s about a $35 million hit to the local economy,” says Mayor Al McGeehan.
Kraft Foods says the high cost of sugar in the United States has forced it to relocate its Lifesavers division to Canada, where sugar is nearly half the price.
And Lifesavers isn’t the first candy maker to head for the borders. Others like Chicago-based Broch’s, Bob’s Candies of Georgia and Jolly Rancher in Chicago are either closing or leaving the country. About 11,000 jobs will be lost in these three companies alone.
Americans consume more than seven billion pounds of candy each year, nearly 30 pounds per person. And candy, like lifesavers, is 98 percent sugar.
These days, even though you’re buying a brand of candy you probably grew up with, chances are it’s been made somewhere else.
“If you don’t move, you’re not going to stay in business here in the United States,” says Sal Ferrera, whose father started making candy in Chicago in 1908.
The family makes lemonheads, fireballs, gummy worms and others. Ferrera has opened two plants in Canada and one in Mexico. He plows through two million pounds of sugar a week, and saves as much as 15 cents on every pound by buying it on the world market.
“It’s really sad that now it’s not being made by Americans,” says Ferrera. “It’s being made over the borders and being brought back into this country.”
But America’s sugar producers say sugar prices don’t explain why the candy companies are leaving.
“These companies are too embarrassed to acknowledge the real reason that they may be leaving,” says Jack Roney of the American Sugar Alliance. “And that is to flee American workers, to flee the compulsion to have to pay workers a decent wage.”
But the bottom line is the American candy industry is in decay and candy-making towns like Holland are being left with nothing more than the hole in the middle.
Whatever Jack, they will be paying more for labour in Quebec than they were in the states.
I am sure the fact the American sugar industry is catatonic and uncompetitive and entirely dependant on welfare from Washington has nothing to do with it.
Interesting statement - and it's even more interesting that they did not expand on it, since it's the crux of the whole story.
OK class, I won't give any hints since the answer's so easy - who will be the first to do PMSNBC's job and give me the correct answer?
From "SOS" to "SOL", kind of like the saying, "Life sucks and then you die". Ooops...
The tariffs on steel from overseas will save some steel workers jobs, but it is going to cost millions of manufacturing jobs
The laughable tarrif on Canadian wood is going to save some jobs but it is going to hurt the real estate and construction markets.
In both cases, our tarrifs are based on illegal subsides that well, frankly don't exist.
And while we are going postal over fictional subsides overseas, Washington is using our tax dollars as toilet paper with new spending on our very own illegal subsides,
Washington Makes Me Want To Puke,
As long as the intention is good, it cannot be challenged.
I lived in Canada for 7 years, and not even the most liberal of Canadians would tollerate this crap.
why isn't Bush vetoing this garbage, that is his job, that is his ONLY job!
It is time for freepers to come to terms with the fact that Bush is every bit as stupid as the democrats make him out to be.
If you think about it lucidly, all that tariffs have done is make the ‘protected’ industry more inefficient and unproductive. Thus they become inept bungling corporate messes.
And if you study economic theory, protectionism was proven to be too challenging for most fiscal policies, and is actually out of vogue. Very few nations have been able to pull it off, and those few have been the ones that have managed to use protectionism to improve the protected industry, and once the protection was lifted the industry was very robust and efficient.
However if you look at the examples in the US this is not the case. American protection is basically set up in a manner that only protects American jobs, but does not provide enough incentive for the industry to improve itself. And although the jobs are saved, for now, they soon disappear once the protection is lifted, and the industry is found to be even more inefficient than how it was at the beginning. And all the jobs that had been ‘saved’ disappear.
Take a look at the steel industry, and compare it to a country like Japan (which is one of the biggest steel exporters in the world). Japan is so efficient that it is in the top tier of steel exporters, even though it DOES NOT have any steel ore or mines whatsoever. It imports the ore, improves on it, and then exports it. The American steel industry on the other hand is pathetic. It is actually miraculous it still exists. And unlike the American Automobile industry which has somehow managed to survive (although I was reading an economic projection that said the Big Three American car makers will be out of business in the decade, or so foreign they are no longer ‘America’) , the steel industry seems facing outright extinction!
And all that protectionism will do is prolong the inevitable.
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