"Creating Shared Value" in the Dominican Republic: Outsourcing, Layoffs, Overnight closure

“Nestlé regards its personnel as its most valuable asset.” – Nesté Corporate Business Principles

For years, workers at Nestlé’s ice cream factory in Santo Domingo, Dominican Republic, worked around the clock: 3 shifts a day, 7 days a week, producing ice cream for the Caribbean.

In the summer of 2006, following a tough two month strike, the union signed a new collective agreement for a much needed wage increase. Part of the agreement provided for a bonus system based on productivity.

Production and productivity rose – in fact by 80%. So in January 2007 Nestlé fired 45 workers and replaced them with contract workers to do the same work. forty-five fewer heads on the payroll, and 45 fewer union members…

Tropical storm Noel ripped through the Dominican Republic and Haiti in October of that year, leaving generalized destruction, misery and thousands of homeless in its wake. Nestlé’s response was to accelerate the process of destroying permanent jobs.

On November 14, while the human resources manager was handing out dismissal letters to eleven long-serving employees, the plant manager was meeting with the union leadership, explaining to them that the dismissals were necessary because of a drop in production, that temporary workers would be hired in their place. He indicating as well that Nestlé would be making further reductions in the number of permanent workers throughout the Dominican Republic.

Increased productivity and rampant casualization weren’t creating sufficient shared value, however, so in June 2008 Nestlé simply closed the plant – with no prior notice.

Workers arriving for the morning shift on June 19 found their factory surrounded by security guards, police officers – and ambulances and paramedics. The workers were herded into the parking lot where they were told that the factory was being shut down with immediate effect. Then their severance cheques were handed out in violation of the contract and of national law.

Nestlé announced that former employees of the ice cream plant would be found other jobs at other Nnestlé facilities. The promised relocation, however, involved only some management and clerical staff. The unionised former production workers remain unemployed.