HERSHEY, Pennsylvania -- Nearly 3,000 Hershey Foods Corp. workers upset with an offer from the nation's biggest candymaker that would increase their health insurance contributions walked off the job Friday at two Hershey factories.
The strike affects two factories in Hershey and about one-fifth of the company's overall work force. Negotiations between Hershey and the Chocolate Worker's Local 464 broke off Wednesday. No new talks were scheduled.
Company officials said a strike would not interrupt service to its customers. Hershey Foods has been building inventory and cash reserves in preparation for a walkout, analysts said.
There were no plans to bring in replacement workers, Hershey Foods spokeswoman Christine Dugan said.
The two plants make a variety of candy, including chocolate bars, Hershey's Kisses and chocolate eggs. Many of those products are also made at the company's 12 other plants in the United States, including a third plant in Hershey, Dugan said.
In midday trading on the New York Stock Exchange, Hershey shares were down 31 cents at $67.80.
Strikers lined both sides of Chocolate Avenue, where one of the plants is located. They shouted and slowed traffic as truckers honked their horns in a noisy display of solidarity.
"This company's making money hand over fist and there's no reason it can't be shared," said Frankleen Gibson, a laborer who tends air conditioning units. "We're ready and we're going to stand tough. We're not going back in a week or two."
Even before the walkout began at 9 a.m., workers began gathering outside the factories and union officials distributed signs that read, "Stop the Greed, Share the Wealth."
"The raises they give won't cover the increases in the medical benefits," said Brian Daubert, a production worker at the West Hershey plant.
A deal offered by the company but rejected earlier this month called for worker health insurance contributions to increase from 6 percent to 10 percent, then 12 percent over four years.
Workers, who receive an average hourly wage of about $18, would get raises of 2.78 percent in the first year, 2.6 percent in the second, 2.65 percent in the third and 2.75 percent in the fourth year.
The company offered to enter into binding arbitration Wednesday but the union refused, both sides said.
The labor stoppage at Hershey is the fifth in the 97-year-old candymaker's history. The last strike by members of Chocolate Workers Local 464 was a three-week work stoppage in 1980, officials from the union said.
Hershey has taken pains to prepare for a strike at the two plants, said analyst George Askew of Legg Mason.
Askew said the company has increased inventories by at least $30 million more than it needs for this time of year and has a cash balance of about $220 million on hand. "They're clearly saving money for this rainy day," he said.
"I wouldn't expect any product interruption in the first month of the strike," Askew said. "After that, it's less clear."