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The Honolulu Advertiser
Updated at 10:50 a.m., Friday, July 25, 2008

Lawmakers caught flatfooted by layoffs

By Chris Hamilton and Ilima Loomis
Maui News

KAHULUI — Maui Land & Pineapple Co.'s plans to eliminate more than 25 percent of its work force caught some Maui County lawmakers flatfooted and left them dismayed.

"This is a sad day for Maui Land & Pineapple Company employees and their families," said Mayor Charmaine Tavares. "I'm sure it was a very difficult decision for the company, whose roots in agriculture in our community go back generations."

The mayor said the county will work with state work-force development services and the island's nonprofit community to offer help those who've lost jobs.

"We are concerned for everyone affected, and our community's history of caring for each other during tough times will be very important," Tavares said. "I have faith that we will pull together to support each other as we always have."

County Council Member Mike Victorino called the job losses "another sad day on Maui" coming on top of the closures of Molokai Properties Ltd. and Aloha Airlines.

He said the layoffs reflect downturns in tourism and construction, which subsidize agricultural operations at large companies like ML&P.

"It's sad because it's only the beginning," he said. "I'm afraid there will be more layoffs by more companies in the not too distant future."

Council Member Mike Molina said he was "at a loss for words" when he heard of the cutbacks.

"I didn't know how to react. I was just, like stunned," he said. "You never expect it to hit the big guys like that."

Molina was concerned Maui workers could be in for more pain if other businesses follow suit.

"I'm thinking, who's next?" he said. "That's what's scary. These are not new businesses to Maui; we're talking about longtime kamaaina businesses. It's going to have a trickle-down effect on everybody. We have to prepare for the worst."

Maui Land & Pine is scheduled to announce today it is cutting its work force by 274 positions, with the biggest chop in jobs striking the company's fresh fruit work force, which will lose 204 positions. A union leader said the company has called a meeting for workers this morning on the layoff plans.

"Oh boy, I'm surprised they are going to cut back on their fresh fruit production," said state Rep. Bob Nakasone, whose district covers Kahului and Lower Paia. "I thought they were doing well now."

Sen. Roz Baker, whose West Maui district includes the Kapalua Resort and Maui Pine's Honolua Plantation, said she was shocked as well. She said that when she met with ML&P executives earlier this month, she was given no indication massive layoffs were coming. Baker said she hoped this was not a precipitous decision by the company.

"All the indications I had from the company were that they had a commitment to agriculture, but I also know companies need to concentrate on the bottom line," she said. "Perhaps I shouldn't be surprised because they were looking at a restructure and taking some actions, but this is a lot of employees."

It's simply awful news, Baker said, especially after Aloha and ATA airlines and Molokai Ranch closed earlier this year. It will likely have a ripple effect in the local economy, she said.

"Maui Pine is an important company in our community," Baker said. "And this is a particularly bad blow for agriculture at a time when we wanted to do everything we can do to protect all kinds of agriculture on Maui."

Nakasone said this looks like the second phase of reductions to ML&P's agricultural operations. After suffering record losses in 2006, in June of last year ML&P closed its Kahului cannery last year and eliminated 120 jobs, saying it could no longer compete with foreign growers.

At the time, Cole said the cannery closing was necessary to save about 300 fresh fruit jobs. He said he wanted to continue to further develop a market niche for the company's Maui Gold pineapples.

The company, which is the largest pineapple grower in the United States, will continue to grow pineapples but details on the extent of the operations are not being released until today.

ML&P owns more than 25,000 acres on Maui, about 6,000 of which is for pineapple cultivation. Nakasone said he wanted to know exactly how this will impact Maui Pineapple Co.'s fresh fruit division.

Nakasone also wondered if the company's long-term plans for the soon-to-be-dormant pineapple fields involves development projects.

"They will have a hard time getting them changed from being classified as ag (state agricultural districts)," Nakasone said.

Victorino said he wanted the council to act to provide financial assistance from the county's emergency fund for laid-off workers, and also called on the state to deploy its rapid response team.

"I'm hoping some kind of emergency help can be available to these people in their time of need," he said.

The county should look for ways to blunt the impact on laid-off workers, such as through a program like Project Help, which provided financial assistance to families affected by the economic downturn after Sept. 11, 2001, Molina said.

"It did provide some relief," he said.

Council Member Bill Medeiros said the county should look for ways to support small businesses, which could absorb some of the layoffs.

"Small businesses have been the foundation for our economy," he said.

State Department of Labor and Industrial Relations spokesman James Hardway said a rapid response team will be at the Kapalua Training Center on Tuesday to meet with resort workers, who will lose their jobs immediately. The agriculture employees are represented by the International Longshore and Warehouse Union and must get a 60-day notice by law, Hardway said.

The layoffs to agricultural workers come as "another blow," said ILWU leader William Kennison.

Kennison, the division director of the ILWU Local 142 for Maui, Lanai and Molokai division, said the union has already dealt with a loss of jobs from the closing of the cannery last June. Maui Pine at the time said it would switch to fresh fruit and juice production but could not longer justify the losses on its canned fruit.

Now its fresh fruit operations are also apparently taking a hit, Kennison said.

He said Maui Pine had contacted him for a meeting today, saying there were going to be some "deep cuts." But he said he did not know the details and is expected to hear them today.

"We understand," he said about the cuts, citing the climbing costs of fuel and the weakening economy. "It's a combination of so much factors."

The state Labor Department rapid response team will assist the workers in registering for unemployment as well as welfare, health care, child assistance, transportation, career guidance and job training, Hardway said.

"It could be difficult for the Kapalua employees because a lot of hotels on Maui are starting to freeze positions," Hardway said. "It could be a different story for the agricultural workers if someone else comes in and buys or leases the farm land. They would need a work force and have one right there."

Hardway said that until his department learns more from the company, he can't say how much the job eliminations will affect Maui. The island's unemployment rate was 4.3 percent in June and historically has the second-lowest unemployment rate in the state behind Oahu. The national unemployment rate is 5.5 percent.

Gov. Linda Lingle was traveling to Colorado Thursday afternoon and could not be reached for comment, said Lingle spokesman Russell Pang.

"With fuel prices what they are, I think most businesses are going through a really tough time," Baker said. "The frustrating thing for me is that the level of government needed to solve those problems is not in Honolulu, it's in Washington, D.C."

Rep. Joe Souki, whose district includes Kahakuloa, Wailuku and Waikapu, called the 99-year-old pineapple grower an institution, which makes its retrenchment more disturbing for Mauians. He said he understands that the company has its reasons, but he can't help but feel sorry for the affected families.

Nakasone, who is a small-business owner, said he also expected the job losses to have an immediate impact on the local economy, especially with West Maui retailers.

"This is not what we need right now," Souki said. "It certainly is not going to help the economy in the state of Hawaii. I understand it's a national problem, but what we need right now is optimism and closures like this erode public confidence."

Staff Writer Melissa Tanji contributed to this report. Chris Hamilton can be reached at chamilton@mauinews.com. Ilima Loomis can be reached at iloomis@mauinews.com.