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There is bittersweet news for investors in Hershey Co (HSY). After over 100 years in the same location, Hershey Co. is electing to close its original chocolate factory, which was built beginning in 1903. The company cites the need to upgrade equipment as the main impetus for the change. The company needs to remain current to effectively compete on the global playing field. Hershey is spending $300 million building a new facility near the original factory's location.closure posts
FeedHershey to Close Original Factory
There is bittersweet news for investors in Hershey Co (HSY). After over 100 years in the same location, Hershey Co. is electing to close its original chocolate factory, which was built beginning in 1903. The company cites the need to upgrade equipment as the main impetus for the change. The company needs to remain current to effectively compete on the global playing field. Hershey is spending $300 million building a new facility near the original factory's location.Ford Shutting Down Mercury Is No Big Deal
As anticipated, there has been little to no reaction from investors regarding the retirement of the Mercury name plate by Ford Motor Company (F). Given the resounding lack of identity which has surrounded the Mercury brand, eliminating the line seems like a prudent and timely move. Market share for Mercury has dwindled to less than 1%, and estimates put Mercury's portion of Ford's share price at something less than 2%.Analysts estimate Mercury's value to Ford is approximately $1 billion, while the company on the whole is estimated to be worth approximately $38 billion. When given the fact that Ford expects to transition it's Mercury dealers into the Lincoln brand line, the fundamental value impact on Ford shall be essentially nonexistent. The company has declared that this inter-company transition shall not result in any job loss.
Looking into Goodyear's future
Based on a pending labor agreement with members of the United Steelworkers Union, The Goodyear Tire & Rubber Co. (NYSE: GT) shares have posted a new 52- week high, rising 40 cents to close at $20.12 on Tuesday, Dec. 26. At market close today, shares were still up.
On its face, the three-year contract now pending appears to serve both labor and corporate interests in reasonable fashion. Goodyear will agree to withhold from closing its Tyler, Texas manufacturing facility for one calendar year and will provide $1 billion in retiree health care provisions. The union will concede to a newly-created pay structure for new hires.
Based on a news release from the United Steel Workers website, "The tentative agreement is endorsed by the USW's Goodyear Policy Committee" which is comprised of local union leaders. Members will be voting on the new contract at ratification meetings on December 28, 2006. The union still colors Goodyear as a nasty corporate entity that previously tried to get away with something, but as we all know unions will rarely paint corporations with a favorable brush. I think the USW would do well to admit that in today's economic climate, this pending agreement should assure that the workers are being very well treated.
Was the upward spike in Goodyear shares premature? I don't think so. It seems to me that both sides on the pending agreement are pretty well satisfied. Now if Goodyear exercises their obligations diligently and honestly and the labor force continues to push ahead as in the past, Goodyear should be on very solid ground for the next three years...until contract time again.
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