Business frustration at Cadbury blow
The South West RDA said that since the Kraft takeover of Cadbury was formally agreed, it had been holding urgent talks with the Department for Business, Innovation and Skills (BIS), DEFRA, and other agencies to understand the full impact of the takeover on the region and across the UK.
Kraft had it was sincere in its efforts to keep open the Cadbury plant at Somerdale, earmarked for closure by the chololate firm, saving 400 jobs, but since the deal has gone through it has abandoned the idea.
Ann O’Driscoll, head of business development at the RDA, said: ”While it is perhaps not surprising that Kraft will be continuing with Cadbury’s plans to close the Somerdale factory in Keynsham, we are disappointed that they initially raised local expectations that the plant could be saved from closure.
“Locally, we will continue to work with our partners to minimise the impact of the Somerdale closure on the workforce and local economy. This includes working with the Cadbury human resources team, outplacement consultant DBM, the union and Job Centre Plus to help staff look for new jobs.
“We are also working with the company, the local authority and the town council to explore the options for the future use of the Somerdale site and encouraging initiatives that promote the local economy.”
The RDA was instrumental in setting up the Cadbury Response Team following the original closure announcement by the chocolate-maker in January 2008. This team helps co-ordinate this work and will continue to provide joined-up support for staff affected by this announcement.
Members of the Cadbury Response Team include South West RDA, Dan Norris MP, Cadbury, Job Centre Plus, Bath and North East Somerset Council, Business Link, GWE Business West, Keynsham Local Partnerships, Keynsham Town Council, the Unite union, West at Work and Government Office for the South West.
The neighbouring authorities of South Gloucestershire and Bristol City Council are also engaged as two thirds of the workforce live in those two administrative areas.
MP Dan Norris will hold a public meeting today to discuss the impact of the closure of the Cadbury plant.
Kraft has been accused of misleading both Business Secretary Lord Mandelson and his Tory opposite number Kenneth Clarke over its decision to stick with the rundown of the historic factory.
Kraft bosses have suggested that it was not until recent days that they realised just how advanced the closure process started by Cadbury's was.
The explanation from the firm which had made keeping Somerdale open part of its bid for Cadbury's has been rubbished by academics and unions angry at the sounding of the death knell for 400 jobs.
Wansdyke MP Mr Norris has called the public meeting for the Key Centre in Charlton Road from noon to 1.30pm today.
He said: "Kraft’s announcement this week that they will stick with Cadbury’s plans to close Somerdale has been a very bitter blow for Keynsham.
“Keynsham people worked together to do everything they possibly could to prevent this closure, and I know they will now be just as determined to shape the future of this proud town.
"They are smarting from Kraft’s announcement, but will bounce back quickly, and stronger than before."
Mr Norris said he was arranging an urgent meeting with Kraft bosses.
He said of today's meeting: "I want Keynsham people to come along and tell me the issues that most matter to them to help shape these discussions.
"I know that the future of the Somerdale site after the factory has closed will be high on the priority list, as will the town’s social and sporting hub, the Fry Club. There will be other Somerdale-related concerns and issues that people want to talk about too.
“Vital decisions lie ahead for our community, and I want everyone to have an opportunity to play their part. This important meeting will help local people set the agenda for my further discussions with Kraft, Government ministers and others."
Lord Mandelson has expressed his frustration with Kraft chief executive Irene Rosenfeld, whom he met last week, and who gave no hint of the Keynsham closure.
He said earlier this week: “When I met the chief executive of Kraft last week, I made it clear that she had not given me any specific commitment or reassurance about any plant in Britain. What I do think, however, is that a week ago, she would have known what announcement was going to be made, barely six days later, and I think it would have been more honest, more straightforward and straight-dealing with the company and its workforce, and also with the Government, if she had told me what their intentions were.”
Shadow Business Secretary Kenneth Clarke added: "Kraft gave me reassurances last week that they expected to be able to keep the factory open, despite Cadbury's announcement in 2007 that it would have to close.
"This is extremely disappointing news, because hopes were raised that Kraft could save the Somerdale site from its already announced closure."
Mrs Rosenfeld said on Tuesday: “In our recent talks with Cadbury senior management, it became clear that it is unrealistic to reverse the closure programme, despite our original intent to do so. While this is a difficult decision, we have moved quickly to end any further uncertainty.”
In the run-up to its £11.7 billion takeover, the American food firm had promised to save the Somerdale plant, which is in the process of being run down by Cadbury, with production switched to Poland.
Kraft said Cadbury had already spent £100 million on building new facilities in Poland and most production would be transferred by the middle of this year.
The firm, whose five-month battle for control of the confectioner was sealed only last week, was accused of “deliberately misleading” workers by saying it would keep the site open.
Jennie Formby, the Unite union’s national officer, said Kraft’s “thirst for public approval” during the takeover led the company to ignore warnings that the timeline for the closure was already “set in stone”.
Ms Formby, who met workers at the factory this week, added: “It is with great anger that we heard the announcement by Kraft that the closure of the Somerdale plant will go ahead as planned.
“Anger that Kraft deliberately misled many hundreds of decent men and women in Keynsham by saying that they would keep Somerdale open, despite Unite making very clear to them as early as September that this seemed impossible with the timeline for closure already seemingly set in stone.
“Anger that Kraft’s thirst for public approval during the most unpopular takeover we’ve seen in recent times drove the company to ignore those warnings and instead choose to state repeatedly that the site would not close.
“This sends the worst possible message to the 6,000 other Cadbury workers in the UK and Ireland. It tells them that Kraft care little for their workers and have contempt for the trade union that represents them.”
She said she could not believe that the firm's investigations into Cadbury had not revealed the advanced state of the closure process at Keynsham.
The Somerdale plant, which makes Crunchie and Curly Wurly bars, was set up by the Fry family and has long been Keynsham’s biggest employer, with 5,000 staff in its heyday.
Amoree Radford, who used to work at the plant and represents the Save Cadbury Campaign, said: “I thought Kraft were sincere, I feel like a fool for being taken in by it.
“Kraft are despicable and they couldn’t even come down here to tell the workers.
“They sent their henchmen to tell the managers who had to tell the workforce on site before 4.30pm, so they didn’t find out any other way.”
B&NES Keynsham councillor Adrian Inker said: “Hopes were raised by Kraft, which was so wrong.
“Cadbury put up a fight but at the end of the day, when the price was right, they went.
“That’s capitalism for you – there’s no thought about people, about communities. It’s just about profit, profit, profit – it’s so sad.”
Fellow B&NES councillor Alan Hale said: “It is disappointing that Kraft has chosen so quickly to decide that they cannot give a future to the Somerdale site.”
Professor David Bailey from Coventry University Business School questioned Kraft’s explanation for its U-turn.
He told the BBC: “Kraft spent a huge amount of money on researching this bid.
“They should have known full well what was going on inside Cadbury and that plans for production in Poland were very advanced.
“I only had access to public accounts and market research reports but it was clear to me that the assurances given about keeping open that plant were simply not credible.”
Liberal Democrat Treasury spokesman Vince Cable has called for the reintroduction of a public interest test for UK takeovers, while Roger Carr, who is stepping down as Cadbury chairman following the deal, has also called on the Government to rethink its policy on takeovers.
He told an audience in Oxford on Tuesday night: “If government really does care, then it is essential they decide in advance of a bid if a company is of strategic importance, publicly confirm that position and develop an instrument that may be applied to dissuade or derail a bid if an asset is declared of strategic importance.”
Kraft said it would honour Somerdale employees’ terms and conditions of the closure undertaken by Cadbury and the commitment to rebuild the Fry Club on the site.
Last March, Cadbury said development of the 63-acre site could create as many as 900 jobs and provide 600 homes.
A survey conducted by Mr Norris had shown that although most people in the town want the factory to stay open, three-quarters thought it would close.
The survey carried out just before the takeover showed that 95 per cent of the 1,093 residents who took part said the factory was important for future employment prospects for Keynsham people.
But when asked how confident they were that there would still be a working chocolate factory at Somerdale in five years’ time, 72.5 per cent said they were not confident.
Mr Norris, whose seat will be renamed North East Somerset and take in more rural areas around Bath at the next election, is holding an informal question and answer session for residents in Batheaston on Sunday February 21.
The event is being held at the Northend pub between 7.30 and 9pm.
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