UPDATE 1-Hershey to cut 1,500 jobs, to build Mexico plant
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CHICAGO Feb 15 (Reuters) - Hershey Co. (HSY.N) on Thursday said it would cut about 11 percent of its workforce and reduce the number of production lines it operates by more than a third as it spends as much as $575 million to overhaul its manufacturing.
The largest U.S. chocolate maker also said it will build a new, cost-efficient manufacturing plant in Monterrey, Mexico.
The company said it will cut about 1,500 of its more than 13,000 jobs in the overhaul. The amount of production from North America and Canada will drop to about 80 percent from the current 90 percent once the manufacturing change is completed, the company said.
The move comes as the maker of Hershey's Kisses and Reese's peanut butter cups has lost market share in the United States to Mars Inc. Hershey has been trying to increase sales by focusing on its core brands, while developing new lines like premium dark chocolate.
Hershey also said it still expects sales to increase by 3 percent to 4 percent in 2007, with earnings from operations up 7 percent to 9 percent. The earnings forecast is below the company's long-term goal of 9 percent to 11 percent, but in line with the company's previous forecast.
((Reporting by Brad Dorfman; Editing by Derek Caney; Reuters Messaging: bradley.dorfman.reuters.com@reuters.net; 312-408-8133)) Keywords: HERSHEY/
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