Hershey, Mondelez failed deal brings peril

STRAIGHT FROM THE HIP

By JIM PURCELL

American manufacturing isn't what it was when I was growing up. I am 50 years old and I, as well as everyone from my era, remembers an America that doesn't exist anymore. There are a lot of reasons for that, and I refuse to try and cherry pick. However, when major American businesses get bought out by foreign investors then it is every American that loses and not just a few. This is when America looks a little less like America and is a chief cause of American jobs moving to Asia or Eastern Europe.

I think something like that could happen with the possible sale of the Hershey Company, which is the largest manufacturer of chocolate in North America. Hershey is as American as apple pie, the flag and bowling...but it might not stay that way, in my opinion.

On October 14, I reported on a trending story about the Hershey Company's CEO, J.P. Bilbrey. He announced he will be stepping aside from Hershey effective next July. This marks the third such exit for a Hershey CEO during the past 10 years. It is not unknown that Hershey has been interested in being bought out, and the latest company that was interested was Mondelez International, based in New Jersey. Was Bilbrey stepping down a result of the Mondelez deal falling apart about seven weeks ago? I do not know, but I believe that is one possible answer.

To add insult to injury, one of the other consequences of the deal between Hershey and Mondelez not going through with a pact is that Mondelez has gone from hunter to hunted as a company.

Here is my concern with the deal that wasn't: Mondelez is an international confectioner and producer of food and beverages. They provide American jobs, they are vested not in the Ukraine or China, but here at home. This is not to say the company doesn't have international interests -- but it has not abandoned its American roots. They know the importance of American jobs and they are one of the brightspots in American industry, in my opinion.

So now, I concluded that not only is Hershey vulnerable to foreign acquisition but, according to published reports, so is Mondelez. Of course, there are always things that people do not see in deals. The deals between private companies are not transparent, nor should they be. But, from what I see this is trouble for the AMERICAN candy industry.

Why?

Well, thanks for asking. I am a former NBA Basketball fan. I am a 'former fan' because a Russian investor came out of nowhere and took my New Jersey Nets to Brooklyn for the sake of marketing. I never heard of him before the Nets deal, and I am not alone in that. The buyer came out of nowhere and, with a wave of his checkbook, changed the demographics of the sport.

There are numerous examples of this practice. Well, I do not want my Hershey's chocolate bar made in Hong Kong or in the Urals. I like the idea that Americans work hard and get paid a living wage, contribute to the economy and have enough security to be able to raise families decently -- all behind that candy bar I buy every now and again.

With both of these companies vulnerable to sale, I think that this is a danger for the American industrial status quo. If one or both of these companies leave the United States it would not just be a defeat for the scores of families effected but for all of us. It would take another small chunk out of the American mosaic -- and there has already been enough chunks taken out as it is.