Hershey Foods Corp. announced plans yesterday to streamline its North American chocolate and confection operations and eliminate 400 jobs as part of a restructuring.
Hershey, based in Hershey, Pa., said its core chocolate and confectionery operations in the United States, Canada and Mexico would be consolidated into a single unit to be named Hershey Chocolate North America.
Michael F. Pasquale, president of Hershey Chocolate USA, will head the new unit. The company plans to take a pretax charge of $120 million to $130 million in its fourth quarter to cover the costs of the consolidation.
Hershey, a maker of chocolate, candies and pasta products, joins other big food companies that have announced cutbacks, including McCormick, Quaker Oats and Sara Lee.
"The industry is very competitive," said John C. Maxwell, Jr., an analyst with Wheat First Butcher & Singer in Richmond, Va. "It's hard to raise prices. All the companies are restructuring to cut costs."
Hershey expects to save $15 million to $20 million a year beginning in 1996 as a result of the revamping.
Shares of Hershey fell 50 cents yesterday, to $46.75, on the New York Stock Exchange.
The revamping "is being undertaken at a time when our financial picture is strong and our business is on track to record another fine year," Kenneth L. Wolfe, the company's chairman and chief executive, said in a statement. Hershey earned $193.3 million, or $2.15 a share, last year.