Hershey closing plants, one in Calif. plans to cut more than 1,100 jobs

The Associated Press
Thursday October 25, 2001

HERSHEY, Pa. — Hershey Foods Corp. plans to close three plants and a distribution facility, eliminate more than 1,100 jobs and turn over production of cocoa powder to outside contractors in a realignment designed to generate at least $60 million a year in savings. 

The company said Wednesday it intends to reinvest the savings to enhance its marketing and selling capabilities. 

“Hershey is a great company with immense strength and an enviable track record. Our strategy both builds on these strengths and capitalizes on significant growth opportunities across Hershey’s business system,” said Richard H. Lenny, president and chief executive. 

About 760 salaried and hourly jobs will be eliminated through the closing of four facilities. 

A manufacturing plant in Palmyra, Pa., that employs 230 people near the corporate headquarters in Hershey, is slated to close during the first half of next year. 

Two others — a Denver, Colo., plant that employs 240 people and a Pennsburg, Pa., plant with 250 employees — are to shut down during the fourth quarter of 2002. 

The company’s western distribution center in Oakdale, Calif., which employs 40 people, is to close in January, officials said. 

Hershey also plans to eliminate 8 percent of its salaried positions, or about 400 people. Lenny said he hopes most of that reduction can be achieved through a voluntary program. 

Hershey employs 14,000 people overall and has 20 manufacturing and distribution plants. 

Company spokeswoman Christine M. Dugan said some employees may find other jobs within the corporation. Severance packages will be available for all displaced workers, she said. 

The realignment is expected to result in charges of $275 million against earnings in the fourth quarter of this year and in 2002.