Kraft pledges no Cadbury job cuts for two years

By Jane Byrne

- Last updated on GMT

Related tags: Takeover, Cadbury

US food giant Kraft issued a public apology regarding the U-turn on its pledge to keep operational the Cadbury plant near Bristol, and it also promised to ensure no job losses over the next two years as it faced a committee of UK politicians yesterday.

Kraft vice president Marc Firestone gave the assurance yesterday when being questioned about the takeover of Cadbury by MPs on the cross-party Business Select Committee.

While it was bidding for Cadbury, the US food giant had promised that it would keep the plant open, but it later announced that the factory would close with the loss of 400 jobs.

"I can commit that, for at least the next two years, there will be no further closures of manufacturing facilities in the UK. And not with-standing any plans that are already underway, there will be no further compulsory redundancies of manufacturing employees in the UK," ​said Firestone.

He told the MPs that, prior to the acquisition, Kraft was not fully aware of Cadbury's plans to transfer production from Somerdale to two sites in Poland, including a new factory.

Firestone added that the US firm only became aware of £100m (€111.3m) spent by Cadbury on equipment for the new factory in Poland after the takeover was completed.

In response to the gasps of surprise his remarks generated at the session, he said that: "I can see the sense of disbelief, but we had no prior access to that information. Of course we were aware that Somerdale was being closed, but we were not aware of Cadbury's plans for massive investment in Poland."

Trevor Bond, the former head of Cadbury in Britain who is now head of Kraft in Europe, told the MPs that that there were no plans to move production of Cadbury brands overseas.

The committee also asked Firestone about rumours that Kraft had secured a deal with Franklin Templeton, the US fund manager that became Cadbury's biggest shareholder during the takeover battle, but the Kraft vice president stressed that he was not aware of any contact that would have breached the takeover rules.

Firestone gave a further commitment that Kraft would adhere to Cadbury’s ethical trading but noted that, as it already has obligations to the Rainforest Alliance, it may look to synchronise that and its FairTrade programmes in the future.

Jack Dromey, deputy general secretary of UK union Unite, who also gave evidence to the committee, said that the 6,000 Cadbury workers will never trust Kraft’s chief executive officer Irene Rosenfeld unless she personally meets them and guarantees no factory closures or compulsory redundancies and that pay and pensions are safe for five years.

“The all-party select committee forced Kraft to take stumbling steps in the right direction, but the company needs to go further and agree a five-year guarantee to rebuild trust.

The lasting legacy of this shameful saga must then be a new ‘Cadbury’s law’ banning hostile takeovers cloaked in secrecy of successful British companies,” ​said Dromey in a statement.

Related topics: Manufacturers, Mondelez International

Related news

Show more

Follow us

Webinars