Holland, Mich., Watches Plant Head to Canada

Publication: Tallahassee Democrat
Printed: Friday, April 19, 2002
Written By: James Prichard, The Associated Press

Around the time that the Life Savers Co. candy plant opened in 1967, television commercials touted Life Savers as "a part of living."

All the Life Savers sold in this country are made at the 429,000-square-foot factory. Invented by candymaker Clarence Crane in 1912 and featuring such well-known flavors as Butter Rum and Wint-O-Green, Life Savers are closely tied to Holland, a popular western Michigan tourist destination settled by Dutch immigrants in the mid-19th century.

For years, the factory's highly sought, well-paying positions were considered jobs for life. But after 35 years of being a part of living for so many people, the Life Savers factory is slowly dying - parent company Kraft Foods Inc. is phasing out production until the plant closes in the summer of 2003.

To save money, the manufacture of Life Savers is being transferred to Canada. The move has incited much anger and debate among the 600 unionized plant workers, and among local officials who wonder about the reasons for the move.

The irony of exporting the production of the all-American candy isn't lost on employees who will lose their jobs.

"It's like, gosh, what a slap in the face!" said Gina Martin, who at age 39 has already worked at the plant 21 years. "I mean, Life Savers is an (American) icon. It is. It's synonymous with baseball and apple pie."

Martin's experience as a candymaker provides her with little comfort these days, as she faces a future as an unemployed single mother of two young children.

She will receive 21 weeks of severance pay - one week for each year of service - plus six months of health insurance and several thousand dollars in bonus pay if she remains at Life Savers until she is no longer needed.

Cathy Pernu, a spokeswoman for Northfield, Ill.-based Kraft, said several factors went into the decision, announced Jan. 8, to move Life Savers production from Holland to a plant near Montreal.

Among them: the company's desire to improve efficiency and take advantage of Canada's lower sugar and corrugated paper prices. But the biggest factor was the fact that the plant is underutilized, Pernu said.

Before Kraft parent Philip Morris Companies Inc. could purchase Nabisco Holdings Corp., which owned Life Savers Co., federal regulators required Nabisco to sell the plant's Bubble Yum and Breath Savers lines.

Pernu denied published reports that the lower cost of sugar in Canada was the main reason for the move. Jack Roney, director of economics and policy analysis for the American Sugar Alliance in Washington, an industry group, said wages, taxes and energy costs, among other factors, also had to be considered before relocating production.

"A pack of Life Savers, at least here in my neighborhood, costs 60 cents at the grocery store shelf. I've calculated that the cost to Life Savers of the sugar in that ... is about one penny," Roney said. "So I would suggest that it's the other 59 cents that is driving candy manufacturers' decisions on where to locate."

Labor costs are one likely consideration. John Boyd, president of The Boyd Co. in Princeton, N.J., a consultant who helps companies select plant locations, estimated Kraft will be able to pay workers at the Quebec plant about $3 per hour less than what the Holland plant workers get.

Al McGeehan, the mayor of Holland, which has about 35,000 residents, said the city never had a chance to try to save the plant.

"At no point in time was Holland offered an opportunity to say, 'Here is what we can do,"' he said.

Not so, said Pernu, the Kraft spokeswoman.

"Sometime last year, our local manager did approach the mayor and Holland officials, looking for ways to take costs of manufacturing out of the system and try to make the plant more competitive," she said. "And at the same time, the plant was implementing internal initiatives to reduce costs. Unfortunately, these actions taken locally could not overcome the disadvantages to the plant."