Kraft Foods split claims its first victims

“As expected, it’s workers who are paying the price of the Kraft Foods split”, IUF affiliate PRO-GE said in response to Mondelez’ announcement, on 30 October, that the Jacobs coffee roasting facility in Vienna (Austria) would be closed. “Mondelez is simply continuing what has long been common practice at Kraft Foods: abandoning sustainable corporate policy in favor of short-term stock market gains.”

Then, on November 1st Mondelez announced that the Mr. Christie’s Bakery in Etobicoke, near Toronto (Canada) would be closed, leaving 550 people out of work.

The company cites “changes in consumer behavior as well as the current competitive situation and the difficult economic environment” as reasons for the Vienna closure. But the true background is the fact that Kraft Foods’ enormous debt from the acquisition of Danone’s biscuit division in 2007 and of Cadbury in 2010, remains, contrary to previous announcements, almost entirely with Mondelez. And this debt will have to be paid off.

Selling the Toronto property to developers who have already surrounded the area with high-rise residential buildings will help in this regard. According to local government authorities, Mondelez Canada is already looking to have the property rezoned for residential use.

IUF affiliate BCTGM notes with concern that most of the production will be transferred to non-union third-party manufacturers and to Mexico, with very little to be transferred to the BCTGM-organized facility in Montreal.