LONDON -- Kraft Foods Inc.'s pledge to safeguard Cadbury PLC's U.K. staff if its bid is successful received a lukewarm response from a key workers' representative Monday.
"It is essential that no one makes rash promises which give false hope to the work force, and in particular to our members under threat of redundancy at the Somerdale plant," said Jennie Formby, national officer for the food sector at the U.K.'s largest labor union, Unite.
The closure of Somerdale and the cuts at Bournville form part of Cadbury's current cost-cutting plan. Kraft says it would keep the Somerdale plant in southwest England open and reverse some of Cadbury's cost cuts at the Bournville factory in Birmingham. "We believe we would be in a position to operate the Somerdale facility, which is currently planned to be closed, and invest in Bournville, thereby preserving U.K. manufacturing jobs," Kraft Chairman and Chief Executive Officer Irene Rosenfeld said.
These commitments are based on Kraft's belief it can expand volumes of Cadbury's products faster than Cadbury can as a standalone company.
The deal's provision to protect U.K. workers has been seen as a way to fend off political criticism from within the U.K., where Cadbury is a much-loved brand. Few U.K. companies are held in such high regard by U.K. consumers. A spokesman for Labour Prime Minister Gordon Brown Monday declined to comment on a possible Cadbury takeover.
But Kraft's commitment to a "net increase" in U.K. jobs isn't a commitment to protect all U.K. jobs, and Kraft didn't provide a time span for the net increase. Michael Osanloo, Kraft's executive vice president of strategy, said Monday that there would likely be job cuts outside of the U.K.
Unite has requested meetings with Kraft and Cadbury so it can evaluate what the bid means for the long-term future of U.K. jobs at all Cadbury sites, as well as its impact on workers' conditions and pensions.
In July, Unite threatened industrial action at Cadbury unless the company reconsidered its stance on pay.
"Recent years have seen a great deal of upheaval for Cadbury workers in this country," said Ms. Formby.
"It is essential that no one makes rash promises which give false hope to the work force, and in particular to our members under threat of redundancy at the Somerdale plant," said Jennie Formby, national officer for the food sector at the U.K.'s largest labor union, Unite.
The closure of Somerdale and the cuts at Bournville form part of Cadbury's current cost-cutting plan. Kraft says it would keep the Somerdale plant in southwest England open and reverse some of Cadbury's cost cuts at the Bournville factory in Birmingham. "We believe we would be in a position to operate the Somerdale facility, which is currently planned to be closed, and invest in Bournville, thereby preserving U.K. manufacturing jobs," Kraft Chairman and Chief Executive Officer Irene Rosenfeld said.
These commitments are based on Kraft's belief it can expand volumes of Cadbury's products faster than Cadbury can as a standalone company.
The deal's provision to protect U.K. workers has been seen as a way to fend off political criticism from within the U.K., where Cadbury is a much-loved brand. Few U.K. companies are held in such high regard by U.K. consumers. A spokesman for Labour Prime Minister Gordon Brown Monday declined to comment on a possible Cadbury takeover.
But Kraft's commitment to a "net increase" in U.K. jobs isn't a commitment to protect all U.K. jobs, and Kraft didn't provide a time span for the net increase. Michael Osanloo, Kraft's executive vice president of strategy, said Monday that there would likely be job cuts outside of the U.K.
Unite has requested meetings with Kraft and Cadbury so it can evaluate what the bid means for the long-term future of U.K. jobs at all Cadbury sites, as well as its impact on workers' conditions and pensions.
In July, Unite threatened industrial action at Cadbury unless the company reconsidered its stance on pay.
"Recent years have seen a great deal of upheaval for Cadbury workers in this country," said Ms. Formby.
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