Changing times in candy land

By Marc Levy

Associated Press

HERSHEY, Pa. — A chocolate workers strike at Hershey Foods has been a bitter reminder to many people here that despite the giant Hershey’s Kisses on the lampposts, the streets named Chocolate and Cocoa avenues, and the cries of delight from the amusement park, Hershey is not Candy Land, and business is business.

About 2,700 members of Chocolate Workers Local 464 walked out at two candy factories April 26 in what is now the longest strike in the company’s 97-year history. The dispute centers on a demand that employees contribute more toward their health care coverage as part of a move by Hershey to control costs and boost profits.

The walkout is the fifth strike in Hershey history. But some say the dispute represents a new bottom-line mentality at Hershey that is at odds with the ideals of its founder, Milton Hershey, a philanthropist who died in 1945.

"In the corporate world, this is nothing new," said Ron Mowry, the 52-year-old manager of a trucking company. But "in the eyes of the town, it’s a sign of the times."

The worst thing to many retirees, employees and Hershey residents is that the man behind the cost-cutting is the company’s first chief executive to be hired from outside the company.

"They’ve been trying to run the big business like a family business," said Stephen Schappe, a professor at the Pennsylvania State University business school in nearby Harrisburg. "But times change, and I think times have caught up with Hershey."

For a century, the works of Milton Hershey and his Hershey Trust Co. have been landmarks in this town of nearly 13,000 people — the majestic Hershey Theater, the Milton Hershey School for disadvantaged children, the twin smokestacks on the original chocolate factory.

Many of Milton Hershey’s projects, like the Hershey Theater, the Hotel Hershey and the Hersheypark Arena ice rink, were built during the Depression, giving jobs to area residents who might otherwise have been unemployed.

Hershey’s amusement park is a major tourist attraction. And on some days, visitors can savor the smell of chocolate drifting from the plants.

"Hershey chocolate is Hershey Foods is Hershey, Pa.," Mowry said.

But now, Bob Brown, who runs a barber shop in town with an antique chair in which the chocolate baron himself used to sit, said Milton Hershey is doing more than turning over in his grave: "The man’s on a rotisserie."

A variety of candies, including Hershey’s chocolate bar, Hershey’s Kisses, Hershey’s Syrup and Mr. Goodbar, are made at the two plants idled by the company’s first strike since 1980.

But many of those treats are also made at the company’s 12 other U.S. plants, including a third, nonunion plant in Hershey, and the candy maker said the walkout has not affected the availability of its products.

More than six months of negotiations failed to resolve the impasse over health care costs. Based on company numbers, the health-care increase for the average employee would be $1,137 over the four-year proposed contract under the lowest-cost plan.

Hershey spokesman John Long defended Hershey’s stance on insurance in light of rising health care costs, saying: "This is fair, reasonable, and in the best interest of our employees and the long-term health of Hershey Foods."

And Hershey’s new chief executive, Richard Lenny, said at a recent annual meeting: "I’m here to do what the shareholders want me to do, which is to increase shareholder value."

Hershey Foods is profitable but had relatively thin margins of 8 percent compared with the 15 percent for one competitor, Wrigley, in fiscal year 2001. Wall Street has rewarded Lenny’s cost-cutting and tough labor negotiations: Hershey has traded at above $65 this year after spending much of last year around $60.

But workers are asking why they should sacrifice when Hershey’s sales and profits are on the rise and the new CEO, hired last year from Nabisco, made $4.6 million in stock options, bonuses and salary in 2001.

"Most people are against Lenny because he’s from out of town," said Rose Resanovich, 75, a retired Hershey Foods forklift driver whose father and husband also worked for the Hershey empire and whose two daughters are now on strike. "He’s trying to change everything."