FRANCE: Danone challenged on job losses, speculation on source of leaked memo
Mayors of towns in which Danone factories threatened with closure are located, meet with Franck Riboud, the CEO of the French dairy, biscuit and water group, in Paris today (Thursday). Following intense press speculation after a memo was leaked suggesting that 3000 jobs would be lost, Danone management has so far failed to clarify the group's intentions over planned restructuring. The story has been followed closely by just-food.com - click here for the latest report or read Catherine Sleep's editorial on the just-food.com home page.
Employees at the ten factories named in the French broadsheet Le Monde remain in shock, since the paper broke the news when the internal memo came into its possession on 11 January. In Besançon, for example, one worker of 25 years' standing claimed that his factory is working at between 70% and 80% capacity, with three shifts each working eight hours at a time, while many factories in the sector are only operating at 40% capacity. "We simply don't understand why our factory is under threat," he said, adding that he was extremely disappointed by the lack of information from management.
This could change soon. Managers at Danone plants are reported to have been ordered to remain silent until today. In the meantime, Danone management has filed a legal complaint against an anonymous party thought to be responsible for the leak.
Industry sources speculating on the source of the leak are of the opinion that it can only be one of three possibilities: an employee who has left the group, senior employees who realised their jobs would be at risk if the restructuring goes ahead or, the most cynical suggestion of all, top management itself, planting rumours of drastic job losses which could then be refuted and a less damaging restructuring plan announced - making the news easier to swallow.
Danone is Besançon's twelfth largest employer, and closure of the biscuit factor would be a severe blow to a town that already reports 8.4% unemployment. And this is a similar story in the other towns where plants are threatened by closure.
If the biscuit division was struggling, employees say they would be less shocked. But Danone claims the operating margin of its biscuit arm is still growing, rising from 6.7% in 1996 to 7.8% in 1998 and 7.9% in 1999. With 9.5% of the global market, Danone claims to be the leader in the world's sweet biscuit market. So why are they planning to trim operations with such devastating consequences? The 3000 employees whose jobs are on the line are hoping today's meeting will answer this question:
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