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Faces In The News: Aug. 30, 2002
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Planned sale of Hershey Foods draws fire
Reuters, 08.01.02, 10:01 PM ET
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By David Morgan
PHILADELPHIA, Aug 1 (Reuters) - The planned sale of Hershey
Foods Corp. was expected to come under fire on Friday
from a broad coalition of the candy maker's hometown neighbors,
including workers, politicians, reform activists and ordinary
citizens.
A crowd scheduled to gather for a midday protest rally in
Chocolate Town Square was expected to include five former
executives of the company that gave the world the Hershey
chocolate bar and Hershey's Kisses, including former Chairman
and Chief Executive Dick Zimmerman.
"We really consider this move to be both unnecessary and
unwise," Zimmerman said ahead of the rally.
The protest is being organized by the National Hershey
Association, a Hershey Trust watchdog group which includes
members of the Hershey family.
The proposed sale of the 108-year-old confectionary company
in Hershey, Pa., was announced last week by the Hershey Trust
Co., a powerful for-profit corporation with trust duties, which
is the sole benefactor of the Milton Hershey School for
disadvantaged children.
With $5.4 billion in assets, the Hershey Trust controls 77
percent of Hershey Foods' voting power and could strike a deal
worth up to $12 billion with a buyer. Among potential suitors
mentioned by analysts are Kraft Foods Inc. , Nestle SA
and Cadbury Schweppes Plc .
But the plan has fallen under increasing criticism from
opponents that not only include former executives but Milton
Hershey School alumni, public figures and small business owners
who fear a wave of job losses and plant closings should a sale
go through.
Many of the community's 12,000 local residents owe their
livelihoods to Hershey Foods, either directly or indirectly.
The trust has acknowledged that the community has legitimate
concerns about the potential effects of a sale but has not
committed itself to requiring a buyer to maintain operations in
the town.
Opposition leaders say their best hope is that Pennsylvania
Attorney General Mike Fisher will act to prevent the sale.
Earlier this week, his office announced a reform agreement with
the Hershey Trust and Milton Hershey School to eliminate
possible conflicts of interest for school board members.
Fisher, a Republican who is running for state governor, has
said he opposes the Hershey sale. Activists hope pressure from
rank-and-file Republicans who make up the vast majority of
local voters will prompt action by Fisher, who has oversight
over charitable trusts as attorney general.
A spokesman for Fisher's office said the attorney general
was not expected to attend Friday's rally.
While trust officials say the sale must take place to
diversify its holdings, of which Hershey stock accounts for 52
percent, critics claim the proposal fails to live up to the
vision of Milton Hershey, the company's Mennonite founder who
established the trust as a vehicle for philanthropy.
"That (vision) includes protecting the local economy from
this plan they've announced," said Ric Fouad, a New York-based
commercial litigation attorney who is president of Milton
Hershey School Alumni Association.
The plan to sell off Hershey Foods also threatens to upset
the company's delicate relationship with Chocolate Workers
Local 464 of the Bakery, Confectionary, Tobacco Workers and
Grain Millers International union, which ended the company's
first strike in 22 years last June.
"The officers, executive board and members of Local 464
will do everything we can to derail the sale of Hershey," said
Bruce Hummel, business agent for the union that represents
about 2,800 blue-collar workers.
Aside from Hershey's future, economist Michael Zweig said
the sheer breadth of opposition to the sale could have wider
implications for the United States if public sentiment toward
corporate power continues to harden in the wake of monumental
bankruptcy filings by Enron Corp. and WorldCom Inc.
"This is something that often happens where corporations
act in ways that threaten an entire community. But in this
climate, people may appreciate it better," said Zweig, a
professor at the State University of New York, Stony Brook.
"What you've got is a whole range of forces unified into
something we're going to see more of," he added.
Copyright 2002, Reuters News Service
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