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Special Reports - Hershey

Thursday, Jan. 31, 2008

Hershey plant will stop production Friday

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The final days at The Hershey Co.'s plant in Oakdale are coming to a close.

This week marks the end of candy production at the massive factory that has sent the smell of chocolate wafting into the air around Oakdale for 43 years.

Friday will be the last day of work for hundreds of employees, ending a nearly yearlong roller-coaster ride.

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  • AT A GLANCE


    SEVERANCE PACKAGE:
    • Employees receive two weeks' pay for each year of service (minimum of eight weeks, maximum of 65)
    • Medical benefits remain in place during payoff period
    • Workers 55 or older can retire with medical benefits at end of severance package

      OAKDALE PLANT FOR SALE:
    • Asking price: $18.5 million
    • Square feet: 615,000
    • Acres: 85
    • Number of buildings: 6
    • Selling agent: CB Richard Ellis
    • Buyer: None confirmed, although there is rumored to be an interested party
  • AT A GLANCE: HERSHEY CORPORATE


    HERSHEY CORPORATE:
    • Hershey said last week that its fourth-quarter profit dropped almost 65 percent. Sales were almost flat and it predicted a drop in earnings in 2008. PRICE INCREASE:
    • Hershey increased wholesale prices by 13 percent this week on standard chocolate bars, king-size bars, six-packs and vending lines. MASS RESIGNATIONS:
    • The Hershey Trust, which owns nearly 78 percent of the company, ousted and replaced eight of 11 members of the candy maker's board of directors in November. The move came eight days after Richard H. Lenny, Hershey's chairman, president and chief executive, abruptly announced he would leave the company. He was replaced by David J. West.
      PLANT CLOSURES:
    • Smiths Falls, Ontario, Canada; 500 workers
    • Naugatuck, Conn.; 200 workers
    • Reading, Pa.; 260 workers
    • Oakdale; 575 workers
    • Dartmouth, Nova Scotia, Canada; 580 workers
    • Montreal; about 200 workers

      ADDITIONAL CUTBACKS:
    • Hershey, Pa.; 900 workers of the 3,000 from three plants in Hershey were offered buyouts or early retirement
    • Lancaster, Pa.; 80 to 100 workers

      PRODUCTS MADE IN OAKDALE:
    • Reese's Peanut Butter Cups
    • Hershey's Kisses
    • Hershey's Miniatures
  •   The Oakdale Hershey plant: Continuing coverage

Before the announcement in April 2007 that Hershey would shut down its Oakdale plant, rumors and speculation swirled for months about its fate. The news of the closure was sad, but somewhat expected, for employees.

Hershey is closing the Oakdale plant, along with five others in the United States and Canada, as part of a restructuring plan that includes moving some production to Mexico. About 3,300 workers were cut from its North American work force.

A new facility in Monterrey, Mexico, is expected to be operational later this year.

The closure announcement invoked strong emotions. Anger and boycotts of Hershey products followed, driven by Stanislaus County residents upset to see well-paying jobs move abroad.

Dozens of people staged a protest outside the Oakdale Chocolate Festival -- an annual event that organizers have promised to continue -- the month after workers learned the plant would close.

The first layoffs in Oakdale were initiated in July. The second group of workers left in September. After the final round of layoffs Friday, only a cleanup crew will remain. The plant will be vacant by the end of February.

-- CHRISTINA SALERNO

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