March 15, 2011 1:33 pm

Kraft refuses to rule out UK job cuts

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Kraft refused to rule out compulsory redundancies at its UK manufacturing sites in the future as executives from the US foodmaker endured more than two hours of attacks over its handling of its £11.7bn ($18.8bn) acquisition of Cadbury.

MPs’ irritation at the refusal of Irene Rosenfeld, Kraft’s chief executive, to attend the select committee hearing – it was the third invitation she had turned down despite being offered the option of video conferencing – set the tone for terse exchanges between backbenchers and Marc Firestone, Kraft’s corporate affairs and legal director.

David Ward, a Liberal Democrat member of the business, innovation and skills select committee, said Ms Rosenfeld’s refusal to attend was a “slap in the face” and “quite contemptuous” to the MPs, as the committee grilled Mr Firestone for 45 minutes on her failure to turn up.

Mr Firestone defended Ms Rosenfeld’s absence, arguing that he – flanked by Trevor Bond, president of markets Kraft Europe, and Nick Bunker, who runs the UK operation, were best placed to deal with questions. But Ms Rosenfeld’s refusal to engage, coupled with a letter sent by Kraft complaining about “remarkable levels of rancour” in the hearing last April, irked MPs.

Nadhim Zahawi, a Conservative MP, said: “I sit here and I find it difficult to understand when a chief executive goes front and centre to lead an acquisition, they go before the analyst community to defend their business all over the world – including the UK, yet they can’t come in front of a select committee and they [instead] send someone, who can’t even close a factory because he doesn’t have the executive responsibility, to speak on their behalf.”

Mr Firestone used the session to reaffirm to MPs that Kraft was sticking to its promise made in March 2010 that no further manufacturing jobs would be cut for two years after it closed the Somerdale plant soon after acquiring Cadbury.

The company said on Tuesday that a quarter of the 400 people who lost their jobs after that closure were working elsewhere, with just 26 redeployed into the bigger company. But, claiming that it was time to “move on” from the controversy, Mr Firestone said Kraft would not give any guarantees beyond March 2012, raising the prospect of further job losses.

Mr Bunker and Mr Bond both said they thought Cadbury could continue to thrive under Kraft and also said redundancy payments for Somerdale had been “well beyond” what was required by law. “As long as our business continues to grow, our manufacturing sites will thrive,” said Mr Bunker.

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