CA Hershey plant's fate uncertain - The Cost Of Nafta
Hershey plant's fate uncertain
Layoffs continue in Oakdale; no signs of interested buyers.
By John Holland - Modesto Bee
Published September 28, 2007
IF ANY PEOPLE are negotiating a sale of the Hershey Co. chocolate plant, they are doing so quietly.
The company is not commenting about its effort to sell the South Yosemite Avenue property here, where another group of employees is being laid off today as part of a phased closure expected to be completed in February.
"I don't have any information to share," Hershey spokesman Kirk Saville said.
Representatives of CB Richard Ellis, the commercial real estate firm marketing the plant, said Hershey asked them not to comment about the process.
Hershey is shutting the plant, along with several others in the United States and Canada, as part of a restructuring that will move some candy production to a new plant in Monterrey, Mexico.
The Oakdale plant, which opened in 1965, employed 575 people when the closure was announced in April. The first round of layoffs was in July, displacing 168 workers. Another 294 were designated for layoffs effective today, but many of them have left already, a union official said.
Some of the candy-making equipment is being dismantled and shipped to Mexico, leaving a partially vacant site for potential buyers to tour.
Hershey is seeking $18.5 million for the property, according to a listing by CB Richard Ellis. The 85-acre site has 615,000 square feet of floor space across six buildings, plus ample utilities and rail access.
Oakdale City Manager Steve Hallam said he has not heard anything about a new tenant. Stanislaus County Assessor Doug Harms, whose office will reassess the property eventually, said he has heard nothing.
Bill Bassitt, chief executive officer of the Stanislaus Economic Development & Workforce Alliance, said he has heard that "there is some definite interest" in the plant, but he did not know from whom.
"I hope it's someone who's going to use it for a production process instead of just warehousing," he said.
The plant has been a sizable buyer of almonds and milk from farmers in and near Stanislaus County. Michael Marsh, chief executive officer of Western United Dairymen, said a dairy processor would be a welcome replacement because the region lacks processing capacity.
"One of the challenges might be that it's so far from (Highway) 99 or I-5, but it does have rail," he said.
Food processing of some sort could find its way into the plant, said John Boyd, a New Jersey-based consultant on corporate location decisions.
"It's a valuable economic development asset for the community," said Boyd.
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