Big Island's Parker Ranch cutting staff
By Hugh Clark
Advertiser Big Island Bureau
WAIMEA, Hawai'i — Falling beef prices, drought and a slumping visitor industry are forcing Parker Ranch to find ways to reduce its payroll.
Ranch trustees and administrators already have accepted voluntary pay cuts ranging from 4 percent to 10 percent, and senior employees are being offered a voluntary severance package that includes two years' pay and continued medical and housing benefits.
Just how many of the outfit's 76 workers, including 25 ranch hands, will accept the offer is not known. Ranch officials said there is no target for how many positions they would like to eliminate.
"This is a beginning, just a first step," said Tom Whittemore, a former First Hawaiian Bank executive and one of three trustees who manage the 155-year-old ranch, one of the oldest and largest in the country.
Vice President Diane Quitiquit said a four-year drought was perhaps the most critical aspect leading to the decision to trim the work force. Parched pastures forced the 220,000-acre ranch to reduce its herd from 22,000 to 17,000 head, and younger cattle are now being shipped to Canada for finishing before slaughter, increasing costs and cutting into profits.
Oversupply and the impact of mad cow disease and hoof-and-mouth outbreaks have cut beef prices, which Quitiquit said will result in a projected loss of $600,000 this year.
Despite the problems, "we are going to continue the ranching operations," she said.
Meanwhile, Parker Ranch's tourist-oriented ventures, including game hunting, wagon rides and horseback tours, are suffering from fewer visitors since Sept. 11. New activities such as a hot-air balloon ride concession that started this month and two large-scale residential projects planned for Parker Ranch land are not yet generating income.
On the plus side, Whittemore said Parker Ranch Shopping Center should have its reopening in May or June after renovation and expansion from 78,000 square feet to 143,000 square feet.
"This is a rough time for everybody," said John Ray, president of Waimea Community Association. "I feel sorry for any individuals who are hurt, but I think the trustees are doing the right thing."
Former South Kona rancher Sherwood Greenwell, who sold his spread to a Japanese investor in 1989, said the move to cut expenses was not unexpected. He said ranchers are facing increased costs for everything, from diesel fuel to water pumps.
This is the second major employee cutback since ranch owner Richard Smart's death in 1992. In 1995, the ranch reduced its 142-member work force by nearly half.
Representatives of the company's nonunionized workers' council were not available yesterday to comment. But two employees said they will gladly accept the severance package.
Bill Whitehead, 59, a 13-year employee who heads the maintenance division, said the deal is "hard to turn down," and he is looking forward to spending more time training horses and growing roses.
After 30 years on the job, Paula De Silva of the ranching office said she is "very excited" about the opportunity to retire. "There are a lot of us who feel the same way," she said.
At his death, Smart, whose family had run Parker Ranch for six generations, was worth an estimated $450 million. He established a trust whose major beneficiaries are North Hawai'i Community Hospital, Hawai'i Preparatory Academy, Parker School and the Hawai'i Community Foundation.
The trust has been struggling after being forced to sell off assets to pay millions of dollars in estate taxes and seeing land values drop with the decline of the Japanese economy.
