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Unite, the union representing Cadbury workers, has written to Irene Rosenfeld, the chief executive of Kraft, demanding more details about its plans for the British confectioner if its £9.8 billion bid is successful.
The union has given Kraft 14 days to respond to the letter, a copy of which has been sent to Todd Stitzer, the chief executive of Cadbury. A source at the union said that if the American company did not give satisfactory answers to its questions, “the gloves will be off” and it would start to lobby hard against the Kraft bid.
The union has asked for guarantees that no sites will be closed and no compulsory redundancies initiated for five years after the proposed acquisition. Unions representing Kraft workers have also been in contact with management about their future. Kraft and Cadbury employ 145,000 people around the world between them.
Last Monday, Kraft launched a formal bid for Cadbury, which it will take directly to shareholders in the next few weeks. The Cadbury board has dismissed the offer as too low.
Kraft has said that it will keep open Somerdale, the Keynsham factory that Cadbury has earmarked for closure, if it its bid is successful. It is understood that the company wants to keep Somerdale for production for the British market, using Cadbury’s Polish factory, which was due to take over Somerdale’s production, to make some of its products for the European market. Cadbury plans to close the Somerdale factory by March, with the loss of about 500 jobs.
The maker of Dairylea has not yet given details of how many jobs will be cut as part of the planned takeover, or any plant closures, but has said that it hopes to save $625 million (£374 million) a year from taking over the maker of Dairy Milk and Crunchie chocolate bars.
Jennie Formby, Unite’s national officer for the food and drink industry, said: “We don’t see where $625 million of savings is going to come from without job losses.”
The union is also worried about “rash promises” being made to Somerdale workers and about the future of the Cadbury pension fund after the merger. It has asked Ms Rosenfeld to guarantee that pension payments will not be decreased under Kraft.
Unite has already informally approached Kraft about the future of Cadbury workers if the bid succeeds. It is concerned about Kraft’s actions during previous takeovers, such as the purchase of Terry’s, best known for its orange-flavoured chocolate. The York factory that used to produce Terry’s was closed in 2005 and production was moved to Eastern Europe.
The role of Royal Bank of Scotland, the part-nationalised bank, in providing financial backing to Kraft’s bid has also angered unions and MPs.
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