Global cost-cutting offensive intensifies at Kraft

On March 16, Kraft nonchalantly announced – in violation of the prescribed procedure – the closing of its Madrid Business Center with the elimination of 70 jobs. Spanish unions are questioning whether Kraft was less than rigorous in its “due diligence” when it contracted branded cheese production at Quesería Menorquina to the now-bankrupt Nueva Rumasa. Also in March, Kraft announced that merchandising (retail distribution and promotion) jobs formerly performed by Johannesburg Cadbury employees would now be assigned to a dedicated contractor employing disposable workers on a casual basis. This follows the planned elimination of 400 FAWU jobs at the company’s Port Elizabeth Cadbury plant – which the union is challenging as a violation of the understanding Kraft gave the regulatory authorities as a condition for the takeover in South Africa.

On April 2, UK Cadbury workers who remain in the final salary pension scheme (Cadbury had already closed it to new employees) were given an ultimatum: “voluntarily” opt out of the scheme or face a 3-year pay freeze. Kraft management, in a by now familiar pattern, explained that they had “overlooked” the details of the pension scheme when they executed the Cadbury takeover…

Kraft is racing to realize by year’s end the promised USD 675 million in cost-savings it promised investors when it organized the Cadbury deal. Nearly half of these savings were to be achieved in manufacturing, procurement and logistics, where they are now accelerating.

But these new targets are superimposed on a cost-cutting imperative which is deeply embedded in Kraft’s pre-Cadbury structures and operations.

Read the full story in the IUF’s latest Kraft Union Network bulletin – click here to download in pdf format.