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Sugar giant cuts 327 workers

The job cuts, described by experts as a sign of the sugar industry's tough financial times, were announced in morning meetings with supervisors. The moves will save the company about $20 million, spokeswoman Judy Sanchez said.

The company brings in an estimated $400 million to $450 million annually.

Some of the 217 full-time and 110 seasonal workers were let go immediately, while others will hang on until the Oct. 10 start of harvest season. The layoffs had been rumored at the Clewiston-based company for weeks, after an independent consulting firm was hired to restructure operations and slash spending.

Privately held U.S. Sugar employs about 3,500 full-time and seasonal workers during the peak of the season. That number is a combination of citrus and sugar operation employees.
The cuts -- from vice presidents to tractor drivers -- come under the leadership of newly hired President Robert A. Dolson, a former utilities executive who came aboard in July with promises to substantially cut company costs. Dolson replaced longtime Chief Executive J. Nelson Fairbanks, who retired after 22 years.

Dolson said the huge influx of foreign imports and the lowest sugar prices in 25 years made it necessary to streamline U.S. Sugar's operation. Prices for domestic sugar contracts closed Friday at 18.6 cents a pound on the Coffee, Sugar and Cocoa Exchange. Growers say they need at least 19.5 cents to break even.

"This was the only prudent thing to do," Dolson said.

Workers losing their jobs will receive one week's salary for every year they have been with the company, plus accrued vacation pay. They also will get outplacement assistance and special consideration in applying for future jobs at U.S. Sugar, officials said.

The company declined to reveal the identities of the employees losing their jobs because it wanted to "protect their dignity," Sanchez said.

Clewiston City Manager Jeffery Newell said the cuts, nearly 10 percent of the company's work force, will hurt the town of about 6,400 residents on the west-central shore of Lake Okeechobee.

"We're a one-company town," Newell said. "Any time you have something like this, there will be a ripple. We're holding our breath.

"We don't know who the individuals are (who lost their jobs), but this is a small town, and by the end of the weekend we'll know."

The cuts come as U.S. Sugar is considering forfeiting 90,000 tons of sugar to the government at the end of this month, when Department of Agriculture loans come due.

The state's two other major growers, Florida Crystals Corp. of Palm Beach and Belle Glade-based cooperative Sugar Cane Growers of Florida, forfeited 47,000 tons collectively last week. Both expect to forfeit tons more within weeks.

Sanchez said U.S. Sugar's agriculture department -- which plants, grows, harvests and transports the sugar cane crop -- was hardest-hit, with 119 full-time jobs lost. The company's agricultural equipment shop, which maintains equipment, lost 33 workers. Forty-one salaried and professional positions also were cut.

The cutbacks are not expected to slow down U.S. Sugar's ability to produce sugar as the new harvest approaches, Sanchez said. The company expects to produce about 800,000 tons of sugar this year.

U.S. Sugar also announced Friday it is restructuring operations into two business units: sugar and citrus. Executive Vice President James Terrill will manage all sugar-related operations, and Executive Vice President Bob Buker will manage citrus operations.

This is the first major restructuring in U.S. Sugar's history, Sanchez said.

In 1994, the company closed South Bay Growers, a vegetable-growing and packaging subsidiary, costing more than 1,000 workers their jobs. Several hundred of those workers later went to work for U.S. Sugar, Sanchez said.

This year U.S. Sugar moved to eliminate executive perks as part of a continuing effort to trim more than $10 million in expenses.

Among the cuts were a corporate jet -- a Cessna Citation -- and cars used by 22 vice presidents and other top executives. Additionally, U.S. Sugar stopped giving college scholarships to the valedictorians of Glades-area high schools and cut back substantially on charitable contributions.

The layoffs drew immediate response from competitors and industry followers who said more of this type of belt-tightening is sure to come as the sugar oversupply continues.

"The announcement made when Mr. Fairbanks retired . . . was that they were going to streamline the company and that changes would be forthcoming, so that set the stage," said Dalton Yancey, a Washington-based sugar industry lobbyist and analyst.

Yancey said the large-scale cutbacks at U.S. Sugar mirror similar trimming going on at family farms and big companies throughout the country.

"This is part of the American management across business in the U.S. as companies try to become more efficient, as they look more particularly at globalization issues, as well as trying to stay alive, particularly as it relates to the U.S. sugar market," Yancey said.

Jorge Dominicis, spokesman with the Fanjul family-owned Florida Crystals, said he did not expect similar cutbacks at his company.

He said the U.S. Sugar cutbacks shed no new light on the already difficult industry conditions.
"We're already in tough times," Dominicis said. "I think we knew that before this announcement."

Jack Roney, director of economics and policy analysis at the American Sugar Alliance, a sugar industry umbrella group based in Arlington, Va., said the layoffs are a painful illustration of the sugar industry's growing troubles.

"It's a reflection of the financial crunch the rest of the industry is in, and I think we're going to see more of this," Roney said. "I think we're going to see increased restructuring of this nature and potentially bankruptcies as well."

Jeff Barwick, director of the Clewiston Chamber of Commerce, said the layoffs came as a shock even though the city's residents already were bracing for the bad news. Many cut back on spending during the summer in anticipation of the layoffs, he said.

But he expects residents to rebound.

"It doesn't make it easy on a small town when you know all the people," Barwick said. "But people will pull up their boots and go about it. It's a hardy bunch out here."