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- Hershey Co. is closing its last Canadian candy factory in Dartmouth, N.S., laying off 580 workers and moving part of the production to the United States and Mexico.

Kirk Saville, a spokesman for Hershey, confirmed Wednesday that the Moirs factory, maker of Pot of Gold chocolates, will close by December and that the company is negotiating severance packages.

He said the U.S.-based firm closed the Moirs factory because it's operating at a third of its capacity and the firm has to come up with ways to reduce costs to "ensure the long-term competitiveness of the company."

"Our manufacturing network operates at less than half of capacity and we must make significant changes across the network in both the United States and Canada to ensure that Hershey remains competitive," he said in an interview.

"We looked at alternatives to closing the plant and none of these would have brought the plant to competitive levels."

Mr. Saville declined to indicate exactly what level of severance the workers will receive.

The company has already announced the closing of its factory in Smiths Falls, Ont., resulting in 500 lost jobs.

The shutdowns are part of a North America-wide restructuring that is expected to result in 1,300 lost manufacturing jobs, out of a total work orce of 13,000 worldwide.

Distressed workers gathered outside the Dartmouth plant as union leaders met with the company to discuss the severance package.

Employee Jackie Norman told CTV that some workers weren't surprised, as rumours of the closing had been circulating for months.

Still, the news hit hard when it came.

"It's upset a lot of people," she said.

Nancy MacDonald, another worker, said "a lot of us employees are unhappy, we're scared, we don't know how it's going to affect our lives."

Ken Drake, a union shop steward, said that for those workers who have spent a lifetime working at the facility "the hardest part is going to be the re-adjusting."

In 2003, Hershey received a four-year payroll rebate from the Nova Scotia government following a $20-million expansion of the Dartmouth plant.

Under the deal, the company would receive $750,000 in tax rebates if it created and maintained 100 new jobs in that period. It also received a $480,000 term loan from the province to purchase land for the expansion.

It wasn't immediately known how those deals are affected by the closing.

It's the second time in two months the province has lost a major manufacturer to lower-cost centres elsewhere on the continent.

On April 4, Oregon-based Greenbrier Corp. announced it was closing the TrentonWorks railcar shops in Trenton, N.S., putting over 300 people out of work.

As with Hersheys, Greenbrier said it is shifting part of its production to lower-cost factories that are closer to its major markets.

Mr. Saville said chocolate production will be moved to various centres across the continent.

"We're moving to a more cost-effective model that increases our use of manufacturing partners in Canada," he said.

"Some of our production is being transferred to existing facilities, some to manufacturing partners, and some to our new facility in Monterrey, Mexico."

Hersheys acquired the plant in Dartmouth in 1987.

Hershey, North America's largest candy maker, has kept two of its American factories going, including its century-old flagship factory on Chocolate Avenue in Pennsylvania.

The maker of Hershey's Kisses, Reese's peanut butter cups and Mounds bars had about 20 plants in the United States, Canada, Mexico and Brazil before the closings started.

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