Hershey Foods on auction block not likely to affect Hershey FCU's future

HERSHEY, Pa. – As executives at chocolate giant Hershey Foods Co. recently announced that the company had put itself up for sale, its outcome will probably not affect Hershey Federal Credit Union, at least in the short term. The credit union’s president/CEO, Diana Roberts, is confident that its “well diversified” member groups will help to buffer any fallout from competitors hoping to buy the 109-year old candy-maker. “The best case scenario is another company will buy them and everything will stay the same for us,” Roberts said. “We are prepared as far as handling what we have to do and we can always go back and look at our charter should the need call for it.” She estimates that between 30% and 40% of the credit union’s membership are employees at eight of Hershey Foods’s subsidiaries here. Chartered in 1949, the credit union serves 7,000 members and has $34 million in assets. Roberts said that members/employees are probably still recovering from a recent tumultuous strike that dragged on for nearly two months, ending in June. Nearly 2,700 members of Chocolate Workers Local 464 went on strike in April after more than six months of negotiations failed to dissolve an impasse over management’s insistence that employees contribute more toward health care costs. Both sides were hung up on a company demand that employee contributions to health care rise from 6% in the first year of the proposed contract to 12% by the fourth year. An agreement was reached in June that would keep the workers’ share of health-care costs at 6% in exchange for a $1.75 an hour wage increase from $18 to $19.75. The maker of popular chocolate products such as Hershey’s Kisses, the Hershey Chocolate bar and various Reese’s products, Hershey Foods has 13,000 employees, had $4.5 billion in total annual sales in 2001 and commands a 30% share of a $16 billion confection market, according to company filings. Meanwhile, Roberts is counting on the credit union’s 50 other select employee groups it serves which range from employment agencies to restaurants to keep operations running business as usual. “The main thing is we are very diversified and that helps us prepare for something like this,” Roberts said. “This is a lesson for the industry that you can’t put all your eggs in one basket with a single sponsor.” Thus far, Nestle SA, Kraft Foods, Cadbury Schweppes and William Wrigley Jr. Co. are among the competitors expected to at least consider making bids for Hershey, according to industry watchers. -