Lessons from Kraft shutting a Cadbury factory

Today, Kraft executives came before the British Parliament to answer queries about the closure of a Cadbury’s factory near Bristol with the loss of 400 jobs. The reporting on this by the news media is sloppy and sensation-seeking. Kraft is positioned as the “evil empire”, too arrogant to even send its CEO to the hearings.

Yes, Kraft “promised” before the Cadbury’s takeover that they would not close any factories. And, yes, it is tragic that another few hundred people will be out of work by the end of next year. But, there is no surprise here, and Kraft should not be seen as the (only) villian.

Firstly, Cadbury had already announced the closure of the factory in 2007, planning to move production to Poland. Secondly, over the past two years, Cadbury has reduced their staff count by 7,000 people (that’s halving their workforce – according to the FT). Kraft it could be argued has, in fact, stemmed the flow of retrenchments from Cadbury. Why is there no mention of this today?

Notwithstanding the talk from headline seeking journalists or nationalistic Brits who can’t stand to see American firms take over “British” companies, there is actually no surprise over the way workers are being treated by Kraft/Cadbury. Until we fundamentally change our mindsets, the relentless pursuit of profit at any price will inevitably lead to workers being treated badly, and losing their jobs.

It’s no use moaning about this unless you’re prepared for the consequences of the alternative. As we approach Easter, would you be prepared to pay more for your chocolates knowing that you were securing 400 jobs at a factory near Wales? Would you pay a premium for Cadbury chocolates? Seriously, would you? It’s easy, for example, to moan about how the greedy bankers led us into a recession with their easy credit. But if you have an interest-only mortgage, or have a “portfolio” of properties that you have financed on cheap credit with the dream of filling them with tenants and selling them when their values escalated, you are as much part of the problem as any banker was. Ditto if you drive a car you can’t really afford, but were able to finance on cheap credit.

Until we, the world’s consumers, tell companies to change their behaviour, their only rational approach is to continue to cut costs. And we send that message by what we buy. If you join in with the general indignation at Kraft in Britain today, then take a few minutes to ask yourself what you will do to make your feelings known. Otherwise, it’s all just bluster.

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