Lifesavers candy abandons U.S. plant

www.msnbc.com ^ | May 31 | Kevin Tibbles

[FourPeas]

Manufacturer says high cost of sugar in U.S. prompted exit

Several hundred workers at the Lifesavers candy plant in Holland, Michigan are losing their jobs, as the company moves production to Canada. NBC’s Kevin Tibbles reports.

HOLLAND, Mich., May 31 — Sometimes steps taken to protect American jobs, however well intentioned, may in fact have exactly the opposite result. Several hundred workers at a Michigan plant that makes Lifesavers candy are losing their jobs — because the company is moving production out of the United States. It is a very sour ending, for an all-American city.

THEY’RE CALLING it death by sugar. After 35 years, the American candy icon, Lifesavers, is closing its plant in Holland, Mich. Some 600 jobs will be gone by next year.

“That’s about a $35 million hit to the local economy,” says Mayor Al McGeehan.

Kraft Foods says the high cost of sugar in the United States has forced it to relocate its Lifesavers division to Canada, where sugar is nearly half the price.

And Lifesavers isn’t the first candy maker to head for the borders. Others like Chicago-based Broch’s, Bob’s Candies of Georgia and Jolly Rancher in Chicago are either closing or leaving the country. About 11,000 jobs will be lost in these three companies alone.

Americans consume more than seven billion pounds of candy each year, nearly 30 pounds per person. And candy, like lifesavers, is 98 percent sugar.

These days, even though you’re buying a brand of candy you probably grew up with, chances are it’s been made somewhere else.

“If you don’t move, you’re not going to stay in business here in the United States,” says Sal Ferrera, whose father started making candy in Chicago in 1908.

The family makes lemonheads, fireballs, gummy worms and others. Ferrera has opened two plants in Canada and one in Mexico. He plows through two million pounds of sugar a week, and saves as much as 15 cents on every pound by buying it on the world market.

“It’s really sad that now it’s not being made by Americans,” says Ferrera. “It’s being made over the borders and being brought back into this country.”

But America’s sugar producers say sugar prices don’t explain why the candy companies are leaving.

“These companies are too embarrassed to acknowledge the real reason that they may be leaving,” says Jack Roney of the American Sugar Alliance. “And that is to flee American workers, to flee the compulsion to have to pay workers a decent wage.”

But the bottom line is the American candy industry is in decay and candy-making towns like Holland are being left with nothing more than the hole in the middle.

[monday]

"Kraft Foods says the high cost of sugar in the United States has forced it to relocate its Lifesavers division to Canada, where sugar is nearly half the price. "

You support tarrifs to protect one industry, you end up hurting others. Protectionists are to stupid and selfish to understand that.

Bush's steel tarrifs will cause many manufacturers that use steel to re-locate over seas and the anti free traders will have only themselves to blame. Idiots.

[PatrioticAmerican]

#10 - That, too. Profits usually drive many decisions. Of course, regulations do, too.

[discostu]

who will be the first to do PMSNBC's job

Neil Cavuto who had this story back in march?! My favorite is the "economist" that estimates Lifesavers' CGS at $.05, of course he shows none of his numbers that he bases that on. If I remember right when Neil had him on the guy was talking about the store sale price, must have forgotten that a lot of that goes to the store.

[TheBattman]

Sugar more expensive in the US than abroad????? What's up with that?

[ml/nj]

Let's not forget that this will mean that Cuban sugar will be used to make Lifesavers. It seems that I can buy Cuban sugar from Kraft, but I cannot buy Cuban tobacco from Padron. (Not that I'm advocating an end to the embargo; I'm just pointing out the hypocrisy here.)

ML/NJ

[monday]

"Sugar more expensive in the US than abroad????? What's up with that?"

Because the US government slaps a nearly 100% tarrif on imported sugar in order to keep prices artificially high for US sugar producers.

Thats why sugar is cheaper in Canada which produces absolutely none. Even after paying to import sugar it is still cheaper than domestic US sugar.

Doesn't it make you feel all warm inside knowing you are paying higher prices for everything that has sugar in it so that you can support a bunch of wealthy farmers?

[edger]

The US is a large scale net importer of manufactured goods and an exporter of hides, grain, farm products, etc. This is not the profile of a manufacturing super power; this is the profile of a Third World Country. And every day the gubmint makes it worse.

I say it again: when the Democrats get in, it gets worse and when the Repubbys get in, it don't get no better.

[rintense]

Some links to the Lifesavers closing history:

State: Keep Lifesavers PLant Open

City Leaders Respond to Lifesavers Plant Closing

Kraft, Union Discuss Plant-Closing Details

State Makes Pitch to Kraft

Lifesavers talks can't lure Kraft

Lifesavers Rescue Bid Sour to Kraft

Lawmakers Request Help for Lifesavers Employees

Lifesavers Employees Denied Goverment Assistance

Lifesavers Caught Up in US Sugar Policy

[Spar]

You can't have competative trade when the traders are not equal in economies of scale.

[Squantos]

The Jolly Rancher Candy Company was founded in Golden, Colorado, by Bill and Dorothy Harmsen in 1949. They called the company Jolly Rancher to suggest a hospitable, western company. The company originally made ice cream, chocolate and hard candy. As hard candy sales grew, however, they began to concentrate on developing their "Famous for Flavor" line of hard candies.

In 1966, the Harmsens sold Jolly Rancher to Beatrice Foods, but the family continued to be involved in the day-to-day operation of the business. Leaf purchased Jolly Rancher in 1983. Hershey Foods Corporation acquired the Leaf North America confectionery operations from Huhtamaki Oy of Helsinki, Finland in 1996.

Lifesavers be damned if they leave America !!!......... Jolly Rancher's.... "FIRE" .... rules !!

Stay Safe !!

[LarryLied]

I wish we could export government jobs. Teaching jobs first. Maybe we could put government schools 100% on line and hire teachers in India. The kids would learn good English.

[Libertina]

If washington didn't make it impossible to manufacture in the United States the companies wouldn't flee
Here in WA State the taxing Democrats managed to drive out Boeing, a really BIG company.

[ContentiousObjector]

If he is such a rocket scientist, why is screwing up everything he touches, look at what he has done so far with his presidency, he is the biggest RINO of them all.

[MadIvan]

The Economist ran an article about this back in 1999. Americans pay ridiculous amounts for sugar, and you had companies like FloSun, giving money to Bill Clinton to keep the sugar subsidies and tarrifs high.

I brought this up with the Pat Buchanan crowd and they gave me a nasal, whingeing lecture about how they didn't mind paying extra money for sugar to sustain the important domestic sugar industry. Well here are the results. The next person whom you see advocating protectionism, hit them with this.

Regards, Ivan

[Snowyman]

Canada which produces absolutely none

Canada produces over 10% of it's own sugar from sugar beets (Alberta). Canadian farmers do not get a sugar beet subsidy The majority of cane is imported from Australia, South America and the Caribbean. Not Cuba.

[TheBattman]

Doesn't it make you feel all warm inside knowing you are paying higher prices for everything that has sugar in it so that you can support a bunch of wealthy farmers?

Unfortunately, not all the farmers are wealthy, but yes, the tarrifs are obviously doing farm more harm than good.

What formed my initial question/confusion was that this situation reminded me of the prescription drug cartel - You can get the EXACT same prescription drugs in Canada for far less than in the US. I didn't know if the Sugar situation was similar or a totally different ball of wax...although in both cases, US consumers are getting the screw.

[kylaka]

"You can get the EXACT same prescription drugs in Canada for far less than in the US".

Actually it would be more accurate to say that Americans can get the exact same drug for less. Believe me, the Canadians are PAYING for it. In effect they subsidize Americans who buy drugs in Canada. Now how right is that?

[Ben Ficklin]

How the sugar subsidy program works