HC&S idles 700 workers for week

Facing the worst drought in its history and a 25 percent loss in sugar production, Hawaiian Commercial & Sugar Co. is furloughing 700 workers for a week, "from the manager to the janitor."

General Manager Frank Kiger said Thursday that the company is having to cut its costs and ordered the unpaid leaves based on the loss of production experienced in this year's harvest after two abnormally dry years.

"Despite occasional heavy rains, like we are experiencing today, our records show that 2008 by far has been the driest year in the last 80-plus years since HC&S began keeping rainfall and ditch flow measurements," he said.

The drought has hit farmers across the state, with Big Island farmers also having to cope with the killing effects of vog. Alan Takemoto, executive director of the Hawaii Farm Bureau, said farmers are banding together to collect statistics on the damage, in order to justify state and federal disaster assistance payments. However, a response from the Hawaii and U.S. departments of agriculture is probably at least six months off.

"We predict annual rainfall will be 35 percent lower than the previous all-time low in 1926," said Kiger. "This is not just a one-year phenomenon; we have been in a prolonged drought for six of the last 10 years, and the last two years have been back-to-back rock-bottom years."

In good years, HC&S produces well over 200,000 tons of sugar, which is about 4 percent of American cane sugar output and about 2 percent of total (including beet) sugar.

In 2005, production was 192,730 tons. The next year, as the drought began to bite, it fell to 173,550. In 2007, it was down to 164,540. Since cane is a two-year crop in Hawaii, production will be suppressed not only next year but at least into 2010 because of drought.

Willie Kennison, head of the Maui Division of Local 142 of the ILWU, said workers understand the drought issue but believe there are other management issues affecting the sugar operations.

"We feel there is a real problem at HC&S," he said.

While the union has been focused on problems at Maui Pineapple Co., which has slashed production and employment and given up on Mainland markets, the ILWU is concerned that HC&S is heading down the same path.

"The employees are very disturbed and concerned," Kennison says. The union is worried that it isn't just drought but management and preparation of fields that is hurting HC&S. He said union leaders have taken their concerns to both management and to the board of directors of HC&S's parent, Alexander & Baldwin Inc.

The company blames drought, Kennison said, but "we've seen drought before."

Kiger emphasized that the furlough is not a permanent layoff.

"We have not undertaken more permanent actions such as layoffs, nor are there any plans for layoffs - only temporary 'no-work offered.' "

The virtual shutdown of the plantation will last longer than the furlough week, because most workers also will be using vacation time over Christmas.

"The company regrets having to take this action, but immediate action was necessary," Kiger said.

HC&S employs about 730 workers, but not all will be off. A crew is required to continue to operate the Puunene Mill power plant, which produces 16 megawatts for the Maui Electric Co. grid. But all sugar-processing operations will be stopped through the holidays.

Seed cane cutting, field prep and planting crews will continue working, when field conditions allow, because Kiger is anxious to get harvested fields "closed up."

Those crews had been placed on furlough earlier this year, when dry conditions prevented them from working anyway. Ditch flows from East Maui were so low that the hydroelectric power station near Paia was shut down for months, and there was not enough water to replant many fields, especially at higher elevations.

Since November, flows in the Wailoa Ditch had been below 29 million gallons a day, falling to 19 mgd on Wednesday. The ditch has a capacity of 200 mgd and is a water source for the plantation and Upcountry Maui consumers.

Once it is established, sugar cane can survive without irrigation. But it needs regular water to get established, and extended water shortages will reduce sugar production.

During a tour of the plantation in September, Kiger said some fields had gone without water for 70 days, a length of time that would have killed any other field crop.

"We don't want to see it go the way of Maui Pine," says Kennison. "We have over 650 union employees (at HC&S)."

* Harry Eagar can be reached at heagar@mauinews.com.