Del Monte's isle closure seen lasting into 2008
The company laid off 511 pineapple workers last month and 15 more employees this month
Florida-based Fresh Del Monte Produce Inc. said yesterday its loss in the fourth quarter of 2006 were worsened slightly by expenses from the closure of its Hawaii operations -- but that shutdown process will last through 2008.
Del Monte, which officially laid off 511 Hawaii pineapple workers last month, has laid off another 15 workers this month.
It now has about 20 union workers left, half of whom will maintain employee housing on land in Kunia leased from the Campbell Estate through December 2008, said Joanne Kealoha, a social worker for the International Longshore and Warehouse Union Local 142.
About 120 houses at the company-operated Kunia camp are occupied by Del Monte retirees and laid-off Filipino immigrant workers, half of whom are over age 55 and receiving emergency assistance through federal grants for dislocated workers.
"We have an agreement with them that they will maintain and operate the camp (through 2008)," Kealoha said. "We don't know what's going to happen beyond that."
The abrupt closure of the produce company's Hawaii pineapple facility and the restructuring of a juice facility in Italy led to $3.7 million in charges, contributing to a net loss of nearly $60 million in the fourth quarter of 2006.
Del Monte reported a total of $43 million in expenses associated with the closure of its Hawaii facility and other restructuring in 2006.
The company posted a net loss of $59.9 million in the quarter ending Dec. 31, compared with a net loss of $3.5 million in the fourth quarter of 2005. For the full year, the company posted a net loss of $145.1 million, compared with net income of $106.6 million in 2005.
Fourth-quarter revenue dropped 3 percent to $737.6 million. Revenue for the year fell 1 percent to $3.214 billion, down from $3.260 billion in 2005 as a result of continued "rationalization" in Del Monte's other fresh produce business, primarily in the North America vegetable line, the company said.
"By every measure, 2006 was the most challenging year in nearly a decade," said Mohammad Abu-Ghazaleh, Del Monte chairman and chief executive officer. He said the closure of underperforming operations and the elimination of unprofitable products among other strategies is expected to help turnaround operations this year.