StarKist Seafoods yesterday announced it will cut tuna production and more than 1,000 jobs at its American Samoa cannery to cope with minimum wage hikes and the island's deteriorating economy.
The company, which is owned by food conglomerate Del Monte Foods of San Francisco, has taken initial measures to eliminate all discretionary overhead, wages and benefits and apply changes to operations and manufacturing.
Under the new policy, vacation and holiday pay will be calculated at the 2006 wage rate, the overtime pay will be revised and limited to lower job grades only, and night transportation and bus subsidies will be eliminated.
StarKist also proposed a new state tax structure that reflects the tax scale provided to other American Samoa businesses.
The company said it can only produce 238 tons daily and staff 1,485 employees, down from 450 tons daily and 2,520 employees.
"In proposing this local tax structure and implementing the other cost-controlling measures, our goal is to minimize disruption in hope that the Congress will act quickly and reverse the dangerous course of the island's economy. However, should the current trajectory continue, we anticipate additional measures will become necessary," the company said in a prepared statement.
StarKist's response to the minimum wage hike mirrors actions taken by local employers after the first 50-cent increase was implemented in July 2007. Both the Commonwealth of the Northern Mariana Islands and American Samoa governments are lobbying Congress to postpone the second increase set for May 25.
