Hershey unions approve company cutbacks

Hershey unions approve company cutbacks

	Published : Sat, 31 Mar 2007 02:58 By : Agencies Print this Story

HERSHEY, Pa. (AP) - Unionized workers at two Hershey chocolate factories voted overwhelmingly Friday to accept a tentative agreement that would keep the hometown factories open but allow the elimination of hundreds of jobs.

The agreement emerged from talks between The Hershey Co. and Chocolate Workers Local 464 in the wake of an announcement by the nation's largest candymaker that it would slash its work force and build a plant in Mexico.

As many as 650 jobs could be cut at Hershey, but the agreement would keep open the two plants where they work, including Hershey's century-old flagship factory on Chocolate Avenue.

The agreement was approved by a vote of 1,813 to 126, according to a message on the union's telephone hot line. A message left with a union official was not immediately returned Friday night.

The company praised the vote, which it said would help keep Hershey competitive.

'The agreement will help maintain Hershey's strong manufacturing presence in Derry Township, while providing very attractive benefits for employees involved in this transition,' Hershey spokesman Kirk D. Saville said in a statement.

The maker of Hershey's Kisses, Reese's peanut butter cups and Mounds bars has about 20 plants in the United States, Canada, Mexico and Brazil.

Hershey said it hopes to make the cuts through voluntary early retirements or buyouts.

The cuts would be made over a three-year period and represent more than a quarter of the 2,200 unionized workers at the two plants here. The deal also provides for a one-year extension to the current five-year labor contract, which expires in 2010.

Union leaders recommended that workers approve the cuts, because they feared alternative plans could be more severe.

The company's restructuring plan announced Feb. 15 is geared to save as much as $190 million a year. Under the restructuring, Hershey plans to cut a net 1,500 jobs. It also announced a plant closure in Canada last month.

Some production currently served in Hershey would shift to domestic contractors and to a plant that is planned in Monterrey, Mexico.

The proposed agreement, which does not call for wage concessions, marks the first time the company has offered an early-retirement plan for hourly workers. The severance plan would provide two weeks of severance for each year of service, with a minimum of eight weeks and a maximum of 52.

It also provides for a one-year extension to the current five-year contract, which is set to expire in October 2010. Workers would receive a 3.25 percent wage increase in the final year.