Hershey Foods, unable to convince striking workers to accept a new contract calling for an increase in their health care costs, has restarted production at one of its two shuttered candy plants in Pennsylvania with non-union workers.
Negotiations aimed at ending a five-week strike at two plants, representing about a fifth of the largest US chocolate maker's total production, broke off earlier this week after a 21-hour session failed to yield a collective bargaining agreement, company and union officials said.
"This (strike) cannot continue," said Ray Brace, Hershey's vice president of operations and technology, in a statement. "We've now reached the point where important decisions are being made about the future of our business."
Investors have begun to worry that the maker of Kisses, Hershey's bars and other confections will have difficulty meeting production demands as it begins to ramp up for the critical back-to-school and Halloween selling season.
Hershey and some 2,800 members of Chocolate Workers Local 464 have been at odds over the company's move to double workers' share of health-care benefits to 12 per cent.
In its statement, Hershey said it had submitted a proposal at the talks which would have reduced the cost of prescription drugs for employees, simplified employee cost sharing on their medical plan and restored retiree medical coverage for some employees. No new talks were scheduled, company spokesman John Long said.
Union representative Robert Oakley said that the two sides had indeed made significant progress in the all-night talks. The sticking point, he said, remained workers' portion of the health care cost sharing, or so-called co-pay.
"The company wants to continue increasing the co-pays and we told them members wouldn't approve that," Oakley told Reuters. "We're so close to a settlement here. I don't know what more we can do for these people."
Hershey's Brace said that one of the two shuttered facilities, known locally as the Hershey plant, has already come on line, and will be expanded with temporary employees. Plans are in the works to restart the other plant, called West Hershey, in coming days, he said.
The plants, which make confections including Hershey's Kisses, Bars and Reese's peanut butter cups, were shut down when the union went on strike.