Unite, the manufacturing trade union, yesterday accused Cadbury Schweppes of behaving like an "asset-stripping private equity firm" following the company's announcement that it would shed 700 jobs by outsourcing chocolate production to Poland.
Cadbury said it planned to shut its factory in Keynsham, near Bristol, by 2010, with the loss of 500 jobs, while 200 further posts would go in Bournville, in the Midlands, at the plant where it has been producing chocolate for almost 130 years.
Much of the work done at the Keynsham and Bournville plants will be switched to the Polish company Wedel, which it acquired in 1998, Cadbury said, because labour and manufacturing costs would be much lower.
The announcement is particularly controversial because Cadbury has a long history of social engagement and community involvement, dating from the reformist attitudes of the Cadbury family, Quakers who founded the company in the 19th century. The Fry family, which merged their company with Cadbury in 1919, bringing the Keynsham operation into the business, came from a similar background.
Brian Revell, national organiser for Unite, said: "This is the sort of behaviour we expect from the short-term, quick-strip private equity firm, not Britain's most respected chocolate manufacturer." He accused Cadbury of planning to sell its site at Keynsham in order to generate a windfall for the company.
However, Cadbury Schweppes has come under increasing pressure to reduce costs following several years of underperformance. It is attempting to sell its US drinks business and plans to cut 7,500 jobs worldwide over the next few years, with the closure of about 15 per cent of its manufacturing plants.
The company said yesterday it believed the move would help it improve profit margins to around 15 per cent, up from 10 per cent currently. Andrew Wood, an analyst at Sanford C Bernstein, said the move made economic sense because rivals such as Hershey operate on margins of 18 per cent or more.
Cadbury managing director Trevor Bond said the company had promised staff it would provide help with retraining. He said: "... in order to continue to compete in the extremely competitive confectionery industry... we need to make the right decision today."
Dan Norris, the Labour MP for Wansdyke, whose constituency includes Keynsham, urged the company to spend heavily on local community projects in the run-up to the closure. "Given the hard work and dedication of the workforce over four generations, it's the least Cadbury can do," he said.Reuse content