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Governor says executives should go, not cannery workers

By Fili Sagapolutele PAGO PAGO, American Samoa, (Samoa News, Aug. 30, 2010) - Gov.Togiola Tulafono continues to insist that StarKist Co. should explain to American Samoa what is being done by the company to reduce high salaries for the cannery’s top officials as part of the company’s cost saving measures, instead of continuing to cut jobs of lower level employees at the StarKist Samoa plant.

Last Saturday close to 400 workers at StarKist Samoa lost their jobs, as part the first phase of layoffs of up to 800 workers at the Satala-based plant.

Togiola has publicly stated several times that he has requested that the Pittsburgh-based company provide information as well as an explanation of whether the cannery has reduced high salaries and bonuses of its top senior management officials as part of the company’s contribution to reducing overall costs.

StarKist Samoa general manager Brett Butler told the House Commerce Committee hearing last Thursday that because StarKist is a private company, such details are confidential and could not be released.

On his weekend radio program, the Governor criticized Butler’s statement, but didn’t identify Butler by name, just cited StarKist.

Togiola described the lack of forthcoming information as excuses by the company, which laid off 380 workers on Saturday, and said there is no clear confirmation as to what is being done to the higher ups on the corporate ladder.

He said the reason he requested such information is because the company is laying off workers in American Samoa at the low pay scale level instead of doing something to reduce huge salaries and bonuses for top management.

(StarKist corporate office has not addressed previous inquires from Samoa News dealing with the same issue.)

Togiola, an attorney by profession, claims that the money saved by the company by laying off lower paid workers in American Samoa is just a small amount compared to huge savings to the company if a reduction is made across the board for its top officials.He said the company could not even reveal that it has reduced these officials pay by 10 percent, which he says is still a big savings for the cannery and could save some jobs in American Samoa.

For a low paid worker at StarKist Samoa, this is the only job for that person and the money earned is huge enough to deal with financial and personal needs for that person’s family, the Governor said.

Why not make huge savings by reducing salaries and bonuses of top officials instead of continuing to focus on the lower paid workers? Togiola asked. "It does not make any sense at all," he said.

"I believe that StarKist should explain to us as what is being done to the salaries and bonuses of its top officials, whose salaries should be reduced as part of the company’s overall cost saving measure," said Togiola, who reiterated that the company continues to focus on local lower paid workers.

"What the company has done to the local work force is neither fair nor right" he stated.

StarKist first announced in May the layoff of up to 800 workers, shrinking the local cannery’s work force to less than 1,200- down from a peak of more than 3,000 two years ago.

StarKist has had to contend with federally mandated minimum-wage increases, but Butler told House members last week that other costs in such areas as utilities and transportation are also rising.

StarKist Samoa’s layoff of 380 workers was confirmed Friday by Mary Sestric, spokesperson with the StarKist corporate office, saying that phase one of the layoffs has been implemented effective Aug. 28.

"Additional layoffs are dependent on cost reduction initiatives currently being evaluated; employees and stakeholders will be given appropriate advance notice," Sestric told Samoa News via e-mail from Pittsburgh. "Until American Samoa returns to its prior position as a globally competitive hub for the tuna industry, StarKist will continually enact cost-saving measures in American Samoa as necessary."

One of the questions raised by House members during the hearing was in regard to StarKist’s plan to operate a loining plant in Samoa, which was made public this month by Samoa deputy Prime Minister Misa Telefoni in an interview with Radio Australia.

Sestric says this is part of the company’s efforts to keep costs down and Samoa is just one option. This was the same explanation provided by Butler to House members last week.

"As we’ve shared in past statements, StarKist has been considering alternate locations for operations as we work to keep our costs as low as possible," Sestric told Samoa News.

"Samoa is one of these options. StarKist has already established a strategic alliance in Thailand to that same end."

"Without concrete assistance that will return American Samoa to a globally competitive position -- either via ASPIRE or another program -- low-cost locations are increasingly attractive," said Sestric.

Butler had also told the House committee that the company has already established an alliance with Thailand and is looking at two other possible alliances overseas.

He explained that most of the eliminated positions at the StarKist Samoa plant deal with chunk light meat to be handled by Thailand, whose electric rates are three times lower than American Samoa.

"Low cost locations are very attractive to us," Butler told the committee, adding that if the company does establish itself in Samoa, it will result in reduced production in American Samoa.

Thailand is the home-base of Thai Union, owner of Chicken of the Sea International, who closed down on Sept. 30, 2009 their local operations at COS Samoa Packing, citing among other things, the mandated federal minimum wage.

Togiola said on his weekend radio program that StarKist is now claiming that minimum wage increases are the reason behind increased costs affecting the company, who in the past were not supportive of the move to halt minimum wage increases. Togiola said the company claimed that they were not affected with the minimum wage.

"We all know the truth -- it’s the minimum wage," said Togiola adding that right after the wage hikes were implemented, Samoa Packing announced plans to shut down operations. Togiola made no mention on his radio program if he had been briefed Friday by StarKist about the layoffs, which was something mentioned by Butler during the House hearing.

A 2007 federal law mandated wage hikes for all 18 industries in American Samoa until the federal minimum wage of US$7.25 an hour is reached. The cannery workers’ current minimum wage of US$4.76 an hour is set to increase by 50 cents Sept. 30 and reach US$7.25 an hour by 2014.

StarKist officials are scheduled to appear today before the territory’s Tax Exemption Board to seek a tax exemption on all incoming materials and supplies associated with tuna operations, Butler said last week.

It is unclear if a representative from the governor’s office will appear during the tax exemption hearing to ask questions. It should be noted that the Governor, will, in the end, be the one to sign off on any tax exemption certificates; and it will be very interesting to note how he will decide on the fate of the StarKist request.

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