Closure due to non-profitablity leaves only Starkist Samoa
(UTULEI) â€“ Governor Togiola Tulafono was notified today that the Samoa Packing cannery plant in Atuâ€™u will cease full operations by September of this year.
The following statement was issued by Governor Togiola:
â€œI was very concerned during Flag Day week when I received word that one of the canneries was closing down. In hearing such news of a lot of people going to be without jobs, I contacted both Starkist Samoa and Chicken of the Sea Samoa Packing to ask about their respective plans since I heard of a possible closure. And I asked to meet with both companies.
So, this morning [May 1, 2009], I received official notice from Mr. John Debeer, Senior Vice President of Chicken of the Sea Inc., that Samoa Packing will be closing their tuna canning operations in American Samoa. The officials from San Diego said they will close down operations by the end of September this year.
I asked the officials if there was any way for talks on how American Samoa can help to keep operations open and they said the decision was final. They said operating a cannery in American Samoa was not profitable because labor costs continue to increase and it is a contributing factor. I even asked if the final decision was due to the 50 cent minimum wage increase. They said a clear answer may be provided through the Government Accountability Office minimum wage impact study.
This is a most unfortunate situation. As the public is well aware, there have been many initiatives to keep the canneries here, but with the economic downturn and recent developments, including the pending minimum wage increase, Samoa Packing is unable to remain viable doing business here in American Samoa. Samoa Packing will be making preparations to depart the Territory beginning today, with full cannery closure by September 30, 2009.
This is exactly the situation that the Territory has been trying to avoid over these past years, especially with regard to the unfounded increases to the minimum wage that has been forced upon the Territory despite having no basis in fact.
Samoa Packing directly employs 2,041 individuals. There are thousands of other jobs that depend on both canneries for their survival as well. The future of these indirect jobs is dependent on whether Star Kist will continue to do business in American Samoa. Besides the direct and indirect employment, the canneries through their operations also support overall costs for shipping, fuel and electricity.
I have pledged Territorial support for the company as they wind up operations in American Samoa. We are committed to making sure that Samoa Packingâ€™s transition out of the Territory is smooth and to ensure that maximum protections are afforded to affected workers.
It is sad to say, but there is practically nothing we can do at this point in time. They say itâ€™s just not viable for them to do business in the Territory. However, they did say that they will retain some people on staff as they intend to have a fish purchasing operation on island and hopes it will be profitable or it also will close down.
We do not have an alternative plan for the soon to be displaced workers. There is no way we can employ them, and if jobs are available, I hope that StarKist Samoa will be able to transition some of them into their operation. But, we suspect there are no jobs available.
As to where we can place them at ASG, we do not have vacancies in the government. COS Samoa Packing has promised to work with their employees to make the transition a little easier. They did not announce specific plans.
As American Samoa prepares to deal with job losses and the blow to the economy, we will continue to work with Congressional leaders and DOI to address the immediate and long term implications of this closure.
Our letters to Washington were sent today to U.S. Senator Daniel K. Inouye, Congressman Faleomavaega Eni and Secretary of the Interior Ken Salazar to humbly ask for their urgent assistance as American Samoa deals with this disappointing development. I have told them the job losses for a major part of the Territoryâ€™s workforce is brutal and a severe blow to our economy. I have asked for their kindest consideration of our initiatives currently before the U.S. Congress and the Department of the Interior as well as new initiatives to help deal with this unfortunate development.
A comprehensive study was conducted in 2007 which analyzed that advent of cannery closures. That study will be an important part of the next steps that the government will take in the coming days.
I am confident that American Samoa can get through this. It may be painful and it may take some time and a lot of patience, but I am sure that we will be able to transition to other industries to help shore up American Samoaâ€™s economy.â€