Kraft’s recent takeover of Cadbury represents a historic moment for the world’s second largest food and beverage company.
But the contempt which the company has shown toward British workers and lawmakers regarding broken promises about the future of Cadbury’s Somerdale plant is shocking.
Workers deserve the truth. Those employed at target companies should at least be entitled to expect prospective acquiring firms to act in good faith when making pledges regarding continued employment.
This did not happen, and Kraft’s resulting loss of reputation is well deserved
The broken promise
Assurances regarding the future of Cadbury’s Somerdale plant in Keynsham represented a key plank of Kraft’s pitch to British lawmakers during the course of the protracted four month battle to gain control of the confectionery manufacturer.
The plant had been due to close in spring, but Kraft had consistently promised to keep it open – a pledge repeated on the day the merger was approved.
But shamefully, the company changed its tune almost immediately after, announcing just one week later that the factory would indeed close after all, and that all four-hundred workers would be made redundant as a result.
Contempt for law-makers
Making matters worse are management’s feeble efforts to pass the blame and the contempt which the company has shown to British lawmakers.
Rather than bothering to show up before British MPs at a hearing of the Commons Business Select Committee (which is investigating whether or not Kraft mislead unions, workers and politicians), chief executive Irene Rosenfeld merely dispatched three middle ranking deputies.
Even more abysmally, one of these, Executive Vice President Marc Firestone, sought to transfer the blame to onto former Cadbury management. Whilst Mr. Firestone did provide a “sincere personal” apology, he went on to claim that Cadbury had failed to share information due to the hostile nature of the bid. Kraft, he said, had acted in ‘good faith’, had been forced to rely on limited information (such as Google images of the factory exterior) and did not realise that Cadbury had invested tens of millions of pounds into a new Polish factory.
Where do we even begin?
To be fair, the difficulties which the company would have faced in gaining approval for the merger in absence of the pledge must be acknowledged. It must also be acknowledged that Kraft could not have been expected to continue to operate an unviable plant, particularly in light of the extent of investment in the new factory.
But this is no excuse.
Let’s start with the broken promise itself. The company changed its tune mighty fast once U.K lawmakers could no longer stop the merger – surely we can’t seriously be expected to believe that they ever had any real intention of sticking to their pledge.
(The problem is not the factory closure itself – unfortunate though they are, factory closures and job losses are essential from time to time. The problem is in the way this was done, and the contempt with which workers were treated during the takeover process)
Equally poor were their buck passing efforts. Kraft can complain all they like about how Cadbury management played hard ball and they were forced to act on limited information. But it was Kraft who made the pledge, not Cadbury management. Kraft must therefore acknowledge sole responsibility for this debacle.
(Seriously, what company of any integrity makes ‘good faith’ promises about keeping factories open without any of its staff having actually seen the factory in question?
Besides, the factory had been slated for closure – did Kraft really have no inkling that it might not be viable?)
Added to this is their blatant lack of respect for the House of Commons. For any chief executive of such a large multinational not to appear before a ministerial committee despite requests for her presence is unprofessional. Rosenfelt’s conduct in this regard shows distain for British law-makers and the people they serve.
Nor was her reason for being absent overly impressive (she had to attend a board meeting). According to Peter Luff, chairman of the committee, the date for the meeting had been set at Kraft’s behest – couldn’t they have chosen a date when she was available? Alternatively, could they not have rescheduled the board meeting? And for that matter, is a company board meeting really more important than showing up before a British ministerial committee?
The way in which Kraft has conducted itself throughout this whole affair has been unprofessional and reprehensible. Their resulting loss of respect is thoroughly deserved.
Respect should be reserved for companies who conduct themselves in a manner of professional integrity.