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Thursday, June 20, 1996 - Page updated at 12:00 AM

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Small Town Tries To Save Payday Plant, Its Paydays

Chicago Tribune

CENTRALIA, Ill. - While serving overseas in wartime, soldiers from this southern Illinois town searched for PayDay candy bars so they could proudly show their friends the line on the wrapper that said "Manufactured in Centralia, IL."

When Hollywood Brands, the locally owned maker of PayDay, was sold to Consolidated Foods in 1968, it was decided to remove "Manufactured in Centralia" from the wrapper. The people of this town of 15,000 protested so fiercely the phrase was restored.

Now, Centralia residents are waging an all-out campaign to keep the PayDay candy-bar factory and the paydays that have come with it for 58 years.

At a time when American workers and their counterparts abroad often fall victim to economic forces outside their control, Centralians are trying to take matters into their own hands. They even sent a select group overseas to confront the hard-nosed CEO of the international conglomerate that now owns the local factory.

"This is one of the most interesting, complex and far-reaching plant-closing campaigns I have ever seen in this country," said Ron Carver, director of strategic campaigns for the International Brotherhood of Teamsters AFL-CIO in Washington, D.C.

In February, Lake Forest, Ill.,-based Leaf Inc. announced plans to shut down Centralia's candy factory and move production to its nonunion plant in Robinson, Ill., by summer's end.

Video announced closure

The surprise decision to shut down and move the town's prized candy factory was made rather coldheartedly, locals said. Officials of Leaf, a subsidiary of Huhtamaki Oy of Helsinki, Finland, sent a videotaped announcement and played it to employees in the factory cafeteria.

"Afterwards, the plant manager was a nervous wreck. He hadn't known about it himself until that morning," recalled Minnie Marshall, a 23-year employee.

It had been known, however, that Leaf and its parent company were downsizing because of a 29 percent decline in company profits. Still, most workers in Centralia had felt safe because their plant had always been highly profitable and is relatively new. A fire destroyed the original plant in 1980. The new plant was built 15 years ago for a previous owner with the aid of a $1.2 million low-interest city loan.

The international conglomerate that owns Centralia's PayDay candy factory is threatening not only the economic welfare of this town but also a key part of local history, residents said.

"The loss of jobs would be awful, but people take losing PayDay personally," said Mike Jones, a reporter for the Centralia Morning Sentinel newspaper, which last month published a 24-page special section called "Please Save Our Jobs" and donated half the advertising proceeds to the campaign to keep PayDay in town.

The newspaper also sponsored essay and poster contests for children on the theme "Why Huhtamaki Oy should spare Centralia's candy factory."

Since the closing announcement, Centralians have rallied around the PayDay plant. After an unsatisfactory meeting in Lake Forest with Leaf executives, whose own ranks have been cut by downsizing, the town focused on the parent company in Finland.

The PayDay candy bar was first made in what had been an abandoned envelope-making plant. Former pasta maker Frank Martoccio of Minneapolis moved his fledgling candy-making business, Hollywood Brands, here in 1938.

The unusual non-chocolate candy bar - with peanut and caramel wrapped around a nougat center - was introduced as the PayDay soon after the plant opened here, and it quickly became the company's top product. By 1960, the Centralia plant had sales of more than $30 million, more than 600 employees and a payroll exceeding $2.5 million.

When Martroccio retired in the early 1960s, his company passed through a succession of corporate owners; first Consolidated Foods, then Sara Lee, and finally, in 1988, Leaf Inc.

"You always knew you could get a job in the candy factory after high school, and they hired high-school kids to work there during the summers, too. It's been one of the better-paying jobs in town," said Jerry Clifton, 35, a 10-year-employee at the plant.

Closing the candy factory could eventually cost the town nearly 450 jobs and an estimated $2.1 million in lost tax revenues and increased costs, according to a study conducted by the Midwest Center for Labor Research and funded by the Teamsters.

Those projections inspired the town to dispatch a delegation to the conglomerate's headquarters in Helsinki last month to make a personal plea to its notoriously tough CEO, Timo Peltola. A dance and several other fund-raisers were held to help pay for the trip. The Teamsters also chipped in.

Cold reception in Finland

A blizzard greeted the group when they arrived at Huhtamaki Oy's headquarters on the ice-choked Gulf of Finland, and they found it was not any warmer inside. "The coldest I felt was when we talked to Mr. Peltola. When we were trying to talk to him, it was like he was looking straight through us," recalled factory employee Minnie Marshall, 42.

The CEO at first refused to move from his position that he was responsible to his shareholders, not to their community, even when the Centralia contingent unleashed its secret weapon: the Rev. James Gullen, pastor of the town's Trinity Lutheran Church.

The minister wore his clerical collar and cross to impress the Finnish executive, whose country is estimated to be 95 percent Lutheran.

"My role was to yank at his heart," Gullen said. "I asked him how he would like it if someone walked in and put in a video that said you'd just lost your job. I got absolutely no response. Maybe when you become a CEO, you take a class in showing no emotions."

After more than two hours of occasionally heated discussion - at least on the part of the Centralians - Peltola did make a small concession. He said he would consider the results of an independent study - to be paid for by the town and the Teamsters - that would explore alternatives to closing the Centralia plant.

Study, closure start

Peltola did not agree, however, to delay the process of closing and moving the plant. And so, even as they worked 11-hour shifts last week to meet the increased demand for their product, Centralia's candy factory workers watched as parts of their plant were being disassembled and moved.

The $40,000 study to save their plant is under way, but the outlook for the future of the PayDay candy factory, and future paydays for its workers is not good.

"The people who work here are like a family, and if the plant closes, it will be like losing a family member," Marshall said. "I haven't even thought about what I am going to do."

Copyright (c) 1996 Seattle Times Company, All Rights Reserved.

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