Harrisburg, PA (AP)- Hundreds at two of Hersheyβs hometown chocolate factories could be cut through layoffs or attrition under a proposed agreement between the nationβs largest candy maker and union negotiators, a newspaper reported Monday.
The agreement emerged from talks between The Hershey Co. and Chocolate Workers Local 464 in the wake of the companyβs announcement in February that it plans to slash its workforce and build a plant in Mexico.
Up to 650 jobs could be cut, but the agreement would keep open the two plants where they work, including Hersheyβs century-old flagship factory on Chocolate Avenue, the Patriot-News of Harrisburg reported.
Workers were scheduled to vote on the agreement later this week, union officials said.
Dennis Bomberger, the unionβs business manager, said the cuts would happen over a three-year period, and represent more than one-fourth of the 2,200 union-represented workers at the two plants. Hershey has said most of the cuts will be made through early retirement or buyouts.
If members reject the agreement, union negotiators believe βthe alternative is even worse,β Bomberger told the newspaper.
Bomberger did not return a telephone message left be The Associated Press and a company official could not confirm the job cuts in the proposal.
A third company factory in Hershey is staffed by nonunion employees.
Since chairman and chief executive Richard H. Lenny arrived in 2001, the companyβs workforce has steadily dropped, from above 14,000 to below 13,000.
The maker of Hersheyβs Kisses, Reeseβs peanut butter cups and Mounds bars has 20 plants in the United States, Canada, Mexico and Brazil.
The restructuring plan announced Feb. 15 is geared to save as much as $190 million a year by shifting work to countries where labor is cheaper as Hershey tries to improve sales in China, India and other fast-growing economies.
βWe are missing out on the cost opportunities that exist outside of the U.S., βLenny told a Wall Street analyst conference in New York on Feb. 20.
Two days later, Hershey confirmed it would close its Smiths Falls plant in eastern Ontario, affecting more than 500 employees at the 44-year-old factory.
Under the restructuring, Hershey plans to cut 1,500 jobs and close some plants, although union officials have speculated that job losses in the United States and Canada will be even steeper because some workers will be added at a new plant in Monterrey, Mexico.
The proportion of Hersheyβs manufacturing in the U.S. and Canada will shrink, from 94 percent currently to 80 percent by 2010, the company has said.