Despite intense media speculation that Danone is readying itself for the closure of 11 biscuit factories and the loss of 3,000 employees, the French foods group is remaining evasive on the issue.
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The group admits that it has plans to restructure its business, and streamline operations, but is refusing to say if any proposed factory closure or job cuts resulting from such a move have been finalised. Company spokeswoman, Diane d’Oleon, commented that Danone is reflecting on a restructuring plan to be completed in 3-4 months, but “it is not at all finalized.”
“It is possible we will say there are certain sites we envisage closing and perhaps we will say that it is necessary to reduce the number of employees,” she added.
The French newspaper, Le Monde, reported the job cuts this morning (11 January), and said that these may double if Danone is able to negotiate terms with subcontractors. AFP meanwhile revealed that of the 11 factories in the line for closure, seven are situated in France, where they employ 1,700 of the potentially axed staff members.
Details of this scale in a restructuring plan cannot legally be disclosed until labour unions are informed. And while the unions say they have not yet been informed, it is likely that such plans would ignite tensions as the officials will fight against any streamlining of this size.
Analyst at Viel Tradition added that Danone is likely to want to avoid social conflict for as long as possible, or at least until March because the transfer of business to other production sites could be politically explosive at the time of France’s municipal elections.
With biscuit brands that include Jacob’s, Britannia and LU, Danone’s biscuit division accounted for around 33% of the group’s entire revenue in 1999, generating €2.8bn. The company argues that because of its aggressive strategy of acquisition over the last ten years, many biscuit plants are now operating at no where near their full potential capacity, a fact that does not bode well for the future of those 11 plants.
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