Sunkist to Trim 66 Jobs in Effort to Reduce Costs
Sunkist Growers, responding to increased competition in the citrus industry, said Wednesday that it is slashing 66 jobs from a full-time work force of 460--including 30 at the cooperative’s Sherman Oaks headquarters.
The move is part of a cost-control program to trim more than $7 million in overhead by Oct. 31, the end of Sunkist’s fiscal year, President Russell L. Hanlin told about 500 Ventura County grower members who gathered at Camarillo Grove County Park for a midyear review.
The program seeks to improve Sunkist’s earnings to attract new members after the marketing organization saw its share of navel orange production this year drop below 50% for the first time in decades, Hanlin said in an interview prior to addressing the growers. The 66 jobs selected for elimination, he said, are generally in “informational, educational and research services” that tended to support the industry as a whole rather than Sunkist’s thinning membership.
The latest move to threaten the cooperative’s pre-eminence in the California-Arizona citrus industry came late last year when Dole Citrus bought Earlibest Orange Assn. and San Joaquin Citrus Co. Both San Joaquin Valley firms were longtime Sunkist packers. Hanlin said Sunkist was able to “minimize” the loss of individual growers whose harvest had been handled by the two new Dole packers--but not enough to keep its share of the crop above 50%.
To try to counter further acquisitions by such publicly traded firms as Dole Citrus’ Los Angeles-based parent, Castle & Cooke, and Riverbend International, headquartered in Sanger, Calif., Sunkist in February launched a real-estate subsidiary. Sunkist Real Estate, Hanlin said, will help citrus producers finance expansion of their groves and facilities, which in turn will help them resist financial inducements to switch allegiance from the cooperative.
Nonetheless, Hanlin said, 1987 represented the fifth straight strong year for the industry, which Sunkist still dominates with nearly 6,000 growers working some 300,000 acres of borange, lemon, grapefruit and tangerine orchards in California and Arizona. Total revenue reached a record $852.6 million, up from $793.4 million in 1986. Sunkist’s members received $612.9 million of that sum, up from $592.3 million and second only to 1985’s record $619 million.
In his remarks to Ventura County growers, Hanlin also blamed California’s congressional delegation for the Reagan Administration’s failure so far to negotiate a new bilateral trade agreement covering orange exports to Japan. The previous pact expired last month, and the United States has filed a charge of illegal trade practices against Japan with the General Agreement on Tariffs and Trade in Geneva.
Hanlin said growers and packers representing 90% of the California citrus production had urged the Administration to give up its “inflexible” insistence that Japan eliminate its quotas limiting the flow of oranges into the island nation. California growers would be better off if Japan agreed to increase the quotas annually while simultaneously reducing tariffs--an approach that the United States has so far rejected. The tariffs range from 20% of the fruit’s value delivered to Japan in summer to 40% in winter, he said.
“We believe the Japanese were willing to expand quota volumes by 10% per year,” he said. If so, a “fully developed market for oranges, which he estimated at 13 million cartons a year, could be achieved over five years. “Perhaps more importantly, as compensation for the ability to continue to use a quota system, we believe the government of Japan was prepared to reduce their import duties. . . .
“American growers would realize more economic value from a duty reduction than they would from quota elimination,” Hanlin maintained.
