Nestlé draws major concern from unions over plans to cut 573 UK jobs
Nestlé’s UK division has confirmed that up to 573 jobs are at risk in the business as part of a major reorganisation of its British confectionery manufacturing – including closing its Fawdon site, writes Neill Barston.
The move is part of a key strategic reorganisation including £29.4 million invested at its core site at York and further location at Halifax, has met with strong opposition from major employment unions GMB and Unite.
As well as the proposal containing plans for re-allocating manufacturing of key lines including Fruit Pastilles to its other UK sites, the company confirms some of the job losses would be accounted for with roles transferring to mainland Europe.
Significantly, today’s announcement follows a key upturn in financial performance for the company’s wider confectionery interests, which recorded CHF 1.7 billion in sales for its latest quarter, against 1.63 billion for the same period in 2020. The results came amid a broader boom in snacks and chocolate consumption amid the ongoing pandemic.
The proposals would see the Fawdon site near Newcastle (below), close its doors for the final time in 2023, having served the business since 1958 Rolos, Munchies, Fruit Pastilles, Fruit Gums and Matchmakers. However, the company defended its plans, claiming the cuts would ‘strengthen UK’s position as a critically important hub for Nestlé Confectionery’ which remains a centre of production for its KitKat, Aero and Quality Street brands. The business cited the fact it had invested more than half-a-billion pounds over the last three decades into facilities as evidence of its commitment to British manufacturing operations.
In a statement on its move, Nestlé said: “Regrettably, these proposals put 573 roles at risk, subject to consultation. Nestlé Confectionery has an ambitious business strategy in the UK and these proposals are intended to support our long-term success in an increasingly competitive category.
“The proposed changes would create a more efficient manufacturing footprint and, in turn, allow greater strategic investment in Nestlé’s biggest confectionery brands. We have chosen to announce these proposals as early as possible to provide the maximum time for consultation with our colleagues and trade unions. We will make sure those affected are properly supported throughout this consultation process.”
The company said it would be making a £20.2 million investment in its York factory to modernise and increase production of KitKat in the city where the brand was first created in 1935. Furthermore, there would also be £9.2 million investment at Halifax to build on its existing expertise and equip the factory to take on the largest portion of Fawdon’s current production.
Its statement continued: “Our Fawdon factory is home to many smaller, low-growth brands and maintains a diverse and complex mix of production techniques. In contrast, our factories at York and Halifax have clearer specialisms and manufacture some of Nestlé’s biggest brands. The decision to propose Fawdon’s closure follows significant investment and a sustained effort by the factory team to reduce that complexity and introduce new products in recent years.
“The skilled and dedicated team at Fawdon have worked tirelessly to deliver those changes and these proposals are absolutely no reflection on their efforts. If these proposals go ahead, we would expect, in future, to be manufacturing a higher volume of products overall while operating a smaller number of factories.
“We do not underestimate the impact that the closure of Fawdon factory would have on the local area and, as part of the consultation, we want to work with the local community to find ways that we can support the area and our employees if these proposals were to go ahead,” it added, noting that reorganising its product was the best means of keeping it competitive.
The site’s main office building, Nestlé House, is currently undergoing a £9m refurbishment. York is also the base for Nestlé Confectionery’s global R&D centre which develops products for markets all over the world. A new manufacturing line was added to the centre in 2020 as part of a £4m investment. Similarly, its Halifax factory had been a notable site for the business for over a century, and would see increased production activity.
Speaking in response to the news, the GMB Unite criticised the proposals as poorly timed amid the pandemic.Ross Murdoch, GMB National Officer for GMB commented: ” To ruin hundreds of lives in a ruthless pursuit of profits, to the very workers who’ve kept the company going during a global pandemic, is sickening.
“Nestle is the largest food producer in the world, with astronomical profits. It can afford to treat workers right. Instead, they’ve allowed factories to deteriorate, outsourced production overseas and now slashed 600 jobs.”