Update: American Licorice Workers on Strike Over Health Benefits

Updated Dec. 5., 11:28 a.m.

About 175 employees are on strike to protest what they say are unfair health benefits.

The company, which has three factories in the United States, employs 178 people at its Union City location, which is where they make all of their popular Red Vines candies, according to employees.

Workers lined up at midnight on Monday and said they’ve been overworked and understaffed for the last several years and that the company recently paid millions for new machinery while laying off more than 20 employees.

According to Rene Castillo, vice president of the Bakery Workers Union Local 125, American Licorice’s contract offer includes a new health care plan that would institute co-pays and deductibles and a one-time $10,000 retirement bonus in place of a pension. The company is also offering a 30-cent increase in hourly pay, but workers are demanding a 50-cent raise.

“They say they have no money to give us a raise, but the machine cost $9 million,” said Victor Arrescurrenaga, a 57-year-old maintenance mechanic who’s worked for the company for 23 years. “They’re making profit and laying off people, that’s why we’re requesting more money.”

Signs of discontent surfaced on Patch last week when we posted a feature video showing how the candy is made.

included complaints about being understaffed, hiring of temp workers and new health care co-pays.

Company spokesman Michael Kelly responded on Patch that the company offered a contract that includes payment of 100 percent health premiums and a wage increase worth about 5 percent over the three years of the contract. The two sides have been negotiating since August.

Kelly said the terms were “unheard of in the current economic climate where many employers are reducing wages or going out of business altogether.”

Castillo, a former employee of the company for 21 years, said there haven’t been any major labor issues until now. He said the company’s wages are “decent,” ranging from $14 to $21 an hour, and that their primary concern is health care.

"For many years we've had a very good health plan. The plan they're offering us, we don't want it," said Roberto Hurtado, 40, an American Licorice employee of 20 years.

Hurtado began picketing at 2 a.m. Monday, along with dozens of other employees.

Workers will remain on strike as long as it takes for management to agree with their terms, Castillo said.

“Whenever they call us to negotiate, we’re ready to negotiate,” Castillo said.

In a statement issued Monday afternoon, American Licorice said their offer to employees was final.

"The company's final proposal to our associates included a pay raise, an improved retirement benefit, and comprehensive health insurance for associates and their families. We have a long-standing and positive relationship with our associates and despite their rejection of our final offer, we’re optimistic that everyone will return to work and the situation will be resolved," the statement said.