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In Hershey, Pennsylvania, you can't cruise past the factory on Chocolate Avenue without getting a whiff of that famous cocoa goodness. Next year, that sweet smell will be gone along with 500 jobs. The Hershey Corporation says it's closing the historic factory and eliminating half the workforce. NPR's Jamie Tarabay reports.�

JAMIE TARABAY: When Milton Hershey broke ground on this factory in 1903, he saw more than smokestacks and a brick building.�

Ms. PAM WHITENACK (Hershey Museum): He didn't build a factory and say, oh, what do I need to do with my workers. I'll build a town. They went hand in hand and were developed simultaneously.

TARABAY: Pam Whitenack is head of archives at the Hershey Museum. She says Hershey wanted to give his employees more than a paycheck. He wanted to create a workers' paradise. Inspired by another famous chocolate maker of his day, Cadbury, in England, Hershey provided low-rent housing, public transportation, and a water park.

A lot has changed. At Hershey World, visitors can make their own candy bars. The amusement park and other recreational activities Hershey originally built for his workers now cater to tourists. The chocolate factory is no longer the biggest employer in town - the Hershey Medical Center is. The number of workers who actually make chocolate continues to shrink.

Mr. DENNIS BOMBERGER (Hershey Employee): You know, they put new equipment in that ran faster, took less people to operate. You know, it was shrinking because of that.

TARABAY: Dennis Bomberger first began work at Hershey in 1967. He was 18 years old and made Kisses.

Mr. BOMBERGER: The new plant is going to be making them exactly the same way, it's just newer equipment.

TARABAY: Hershey is spending $300 million on a new facility being built just outside town. Six hundred workers from the old factory will move there. The rest are being replaced by machinery.�Hershey's reshaping itself to fend off global competition. It has a huge new competitor in Kraft, which recently bought Cadbury.

Bomberger understands why the historic factory has to close. It's old and can't accommodate new equipment.

Mr. BOMBERGER: The ceilings are low and they do have a lot of columns in there that you have to go around.

TARABAY: Standing near a ticket counter at Hershey World, company spokesman Kirk Saville says Hershey is doing this to stay competitive.

Mr. KIRK SAVILLE (Spokesman, Hershey): We're creating a cost-effective, efficient facility that will enable us to compete with global players and meet the needs of customers and our consumers.

TARABAY: Hershey had wanted to move production out of the Pennsylvania town altogether, but decided to keep it here when the union agreed to the job cuts. That's small consolation to some workers.�

Here at the Parkside Grill the mood is one of uncertainty.�It's still unclear who'll stay and who'll lose their jobs. There's already been one round of voluntary buyouts. Bob Laird is a local businessman whose fianc�e works at the Hershey factory.�

Mr. BOB LAIRD (Businessman): I hate to say it, but I think Milton's probably turning over in his grave seeing things that have happened in the last few years.

TARABAY: Laird sees the factory closure and job cuts as a sign of corporate greed and says it's a rejection of Milton Hershey's original vision of providing for his workers. Author Michael D'Antonio disagrees.

Mr. MICHAEL D'ANTONIO (Author): Oh, poor Milton Hershey has been turning in his grave so many times since he died that I imagine he's quite worn out. You know, he understood that all things change.

TARABAY: D'Antonio, who's written a book about Milton Hershey, says the legendary confectioner was after all a businessman and made decisions based on the market and the bottom line.�

Jamie Tarabay, NPR News.

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