Herbalife reaches 1,000 local employees; more than doubles hiring pledge

Herbalife Ltd. came to Winston-Salem bearing a pledge of creating 493 full-time jobs and the weight of several investigations into its business practices.

Since beginning production in May 2014 at its $130 million plant, the nutritional company confirmed Thursday it has more than doubled its Winston-Salem workforce to 1,000.

The company said the hiring is in response to increasing consumer demand for its nutrition products, such as dietary supplements and milkshake powder.

That means Winston-Salem represents 42 percent of Herbalife’s 2,400 domestic workforce and 12 percent of its 8,300 global workforce.

The plant, its largest overall, provides more than 400 Herbalife products to more than 50 global markets.

At 1,000 employees, Herbalife has entered the top-10 private employers in Forsyth County. Wells Fargo & Co. is the top private employer at 2,745.

It also becomes arguably one of the most successful examples — to date — of the payoff from local performance-based economic incentives.

That’s in comparison to the departure of Dell Inc. and with it 1,400 Dell-badged and contractor jobs, and the shrinking of the Caterpillar Inc. workforce from a pledge of 510 full-and part-time jobs and a hiring peak of 438 to 140 currently.

Herbalife has exceeded workforce projections even as some detractors, particularly billionaire hedge-fund investor Bill Ackman, have tried aggressively to drive it out of business through legal and regulatory challenges.

Michael Johnson, Herbalife’s chairman and chief executive, said the Winston-Salem plant has become what had been the promise of the building’s first occupant, Dell Inc., in becoming a global center of commerce and innovation.

For example, Johnson said the local plant will host the Herbalife Nutrition honors event in March with more than 3,000 distributors from around the world in attendance “so they can experience this incredible facility firsthand.”

“We now self-manufacture about 65 percent of our products and are setting the standard for our industry in quality manufacturing.”


In 2012, the city made Herbalife eligible for $2.25 million in performance-based incentives for its initial plant investment, along with $1.19 million from Forsyth and $10.5 million in state incentives.

In exchange for a 300-job expansion commitment in 2015, Herbalife has been made eligible for up to $2.9 million in performance-based incentives from the state Job Development Investment Grant program as well as $150,000 each from the city and county.

“It is very heartening to see the success they are having, and we welcome the new jobs to our community,” Mayor Allen Joines said.

“Each (economic development) project has its own life and schedule, so having a success, such as Herbalife, helps to even out some of the projects that may experience a decline from time to time.”

Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said the community should celebrate the Herbalife expansion as an example of how it has worked hard to meet its hiring needs, as well as other employers, during a time of low unemployment and the challenge of providing applicants with the skills needed to operate advanced manufacturing equipment.

“We continue to work with our K-12 schools, colleges and universities to ensure that the skills prospective employees needs are being addressed, and to create smooth pipelines among employers, educational institutions and applicants,” Anderson said. “This is one of our community’s many strengths.”


Having Herbalife as a major private employer hasn’t always been easy on the community’s nerves.

For example, employees, elected and civic officials were breathing a sigh of relief when Herbalife announced July 15 a $200 million settlement with the Federal Trade Commission.

Although the settlement drastically changed its business model, it gave Herbalife the opportunity to reset how it defines its seller base and adjust its U.S. practices.

At least 300,000 distributors have changed their status to preferred members since November, those who only purchase Herbalife products for the discount.

Herbalife said Thursday it “believes the conversion of participants to preferred members is in line with (FTC) expectations.“

Edith Ramirez, the FTC’s chairwoman at the time of the settlement, said “Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make.”

At that time, Johnson called “the settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully.”

“Otherwise, we would not have agreed to the terms.”

Accusations of Herbalife operating as a pyramid scheme were made public by Ackman the same day — Dec. 19, 2012 — that Herbalife said it would take over the closed Dell computer-assembly plant. There has not been any confirmation that Ackman timed his campaign against the company to counter the plant announcement.

Ackman has been under significant investor pressure in recent months because his more than $1 billion short-sale bet against Herbalife has not proven successful, along with a major plunge in the value of his investment in Valeant Pharmaceuticals.

Ackman has said that for his Herbalife bet to become profitable, its share price would have to drop below $31.

The share price jumped as much as 21.7 percent, to $72.22, shortly after the settlement was made public. The 52-week share price range is $42.26 to $72.22.

Article source: http://www.journalnow.com

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