|
LAST WEEK we hinted that Cadbury’s investors would vote for a takeover by the American multinational, Kraft Foods. We were right.
At the time we said that the future of Cadbury’s lay in the hands of its investors. The original caring ethos of Cadbury would mean nothing to them, as they “only have their own interests at heart.”
Although Cadbury’s is normally described as a ‘British institution’, it’s not as ‘British’ as is claimed. In its coverage of the take over bid, the Guardian noted:
“Kraft only needs the support of 50% of Cadbury's shareholders to win control. It is a figure that looks achievable as despite objections from British institutions such as Standard Life, 40% of its shareholders are American funds, which have no objections to owning Kraft stock. Some 20% are short-term investors such as hedge funds, which have indicated that they would accept 850p.”
Even though Standard Life originally objected to the takeover, it was soon won over by the Yankee dollar. Indeed, David Cumming, head of UK equities at Cadbury shareholder Standard Life, summed it up when he said "Kraft are getting a good deal. It's sad that Cadbury is gone, but business is business."
Kraft’s only other serious rival was fellow-US company, Hershey. But Hershey – the largest chocolate manufacturer in North America – soon dropped out of the race to snap up Cadbury.
When the Cadbury board advised its shareholders to accept the Kraft offer, it was more or less a done deal. The vote was just a formality.
The future of Cadbury’s 4000 plus workforce now lies in the hands of Irene Rosenfeld, the Chief Executive of Kraft Foods. Kraft have said it expected "meaningful cost savings" as a result of the merger – a $675 million cost-saving plan has been mooted.
During the course of the takeover bid, no specific assurances over jobs were given. It has not ruled out cuts, and staff numbers at Cadbury's head office in Uxbridge, West London, are expected to be cut.
Workers are skeptical at Kraft’s announcement that it wants to invest in the Bournville site and maintain production at Somerdale, near Bristol, (also known as Keynsham.) They want to know how Kraft will invest when it is in so much debt itself! Indeed, it is having a $4 billion bond sale to help pay for its $19 billion takeover of Cadbury.
(In order for its takeover bid for Cadbury to be successful, Kraft had to up its original offer and promise a higher percentage of the takeover funds will be paid in cash – increasing the company's debt load.)
Many workers believe that Kraft will have to make cuts to meet its debt payments. It’s a fair bet that Irene Rosenfeld will look at jobs and conditions. Apparently, the company already has a track record of cutting production and moving production abroad.
Therefore, there's no guarantee that Kraft will keep Cadbury’s in Britain or Eire. This means that there may be troubles ahead...
|
Comments
To me ‘Globalism’ is just another form of US imperialism. In one way we’re lucky to be living in Europe. Economic imperialism just requires the Yanks to flex their financial muscle. Hence they just buy out whatever company they like. Things could be worse. Look at Afghanistan which is bearing the brunt of US military imperialism. Here they seem intent on bombing the place back into the Stone Age.
I think you’re right about Cadbury’s. Kraft will probably asset strip the place and move production out to Asia or the Far East. I think the writing’s on the wall here. Have a gander at this link:
http://www.independent.co.uk/news/business/news/cadbury-top-bra ss-quit-hours-a fter-kraft-take -over-1888887.html
You’ll notice that the top directors all seem to be getting out whilst the going is good. As usual the ordinary working folk will get shafted. Ok, they may walk out with a half decent redundancy package – but let’s face it anyone around the 50 mark will probably never work again. They’ll just end up on daft government training schemes designed to massage the unemployment figures.