Kraft boss's failure to face grilling by MPs leaves her with Creme Egg all over face

LONDON BRIEFING: If Akio Toyoda of Toyota could appear before Congress, then why not Kraft’s Irene Rosenfeld at Westminster? …

LONDON BRIEFING:If Akio Toyoda of Toyota could appear before Congress, then why not Kraft's Irene Rosenfeld at Westminster? asks FIONA WALSH

SO WHERE was Irene, who on earth is Marc and how do the Vikings come into it?

Irene – Rosenfeld, that is – was anywhere but Westminster yesterday as MPs gathered to grill executives of the US food conglomerate Kraft over its controversial £12 billion takeover of Dairy Milk chocolate-maker Cadbury.

The Kraft chief executive’s decision to snub the proceedings ensured the hearing got off to a sour start, angering the politicians and enraging Cadbury’s union, Unite, which represents the 6,000-strong UK workforce and which fought hard to prevent the takeover.

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Had she appeared, it would have been the first sighting of Rosenfeld this side of the Atlantic since Cadbury capitulated to the Kraft takeover in late January.

Instead Rosenfeld sent the hapless Marc Firestone, Kraft’s head of corporate and legal affairs, to face the barrage of hostile questions from the House of Commons’ business, innovation and skills committee. He was accompanied by two executives from Cadbury, but it fell to Firestone, dismissed by the politicians as a “PR man” and an “apologist” for the Kraft CEO, to defend the company against accusations that they were no better than Vikings, pillaging a great British company with a proud history of 186 years.

At issue yesterday was Kraft’s broken promise, made during the height of the takeover battle, to save Cadbury’s plant in Somerdale, near Bristol, from closure. Within weeks of securing Cadbury, Kraft went back on its word. Closure of the factory, with the loss of 400 jobs, is now going ahead in line with Cadbury’s earlier plans, with the work being transferred to Poland.

Firestone’s excuse yesterday that the US group could not have known that the transfer to Poland was already too far advanced to stop was lame indeed, although he did offer some reassurances on jobs to the Cadbury workforce. There will be no further compulsory redundancies on the manufacturing side, nor factory closures, for two years, although research and development operations were not included in that guarantee.

On products, he said Dairy Milk would continue to be made in the UK and there were no plans for Kraft to rename the Cadbury Creme Egg or other much-loved brands.

“Cadbury will remain the name on the flag,” he said.

Not surprisingly, the union was unimpressed. Unlike Kraft, Unite wheeled out one of its big hitters for the hearing, deputy general secretary Jack Dromey, who again accused the US conglomerate of lying. The Cadbury workforce would never be able to trust Kraft’s promises unless Rosenfeld delivered them personally, he said, although he conceded that yesterday’s commitments were at least “stumbling steps in the right direction”.

The U-turn on Somerdale has been a PR disaster for Kraft and serves as a graphic illustration of what not to do during takeover battles.

The future of the plant is, of course, vitally important to its workforce but had little bearing on Kraft’s eventual victory in the takeover battle. Cadbury made the hugely unpopular decision to close Somerdale well before Kraft arrived on the scene and had already taken the flak from the unions and press.

Unless it was absolutely certain it could save the factory and its workforce, Kraft should have kept its own counsel rather than risk an embarrassing reversal. Even the union representatives cautioned Kraft against making any “glib” promises over the future of the plant and said yesterday they had never trusted the bidder’s promises.

The whereabouts of Irene Rosenfeld weren’t revealed yesterday although there was some talk of her attending a Kraft board meeting in Chicago. But the Kraft CEO would have been better advised to have shown her face in Westminster, preferably after taking a lengthy tour of Cadbury’s Bournville headquarters.

Her failure to show any apparent personal interest in Kraft’s latest acquisition has infuriated not only the workforce and unions but also, as was clearly demonstrated yesterday, Britain’s MPs. If Akio Toyoda of Toyota could manage to appear before Congress over the car manufacturer’s recall, then why not Rosenfeld at Westminster?

Winning the hearts and minds of a workforce is one of the key factors in successfully implementing an acquisition. And it’s not just the 6,000 or so UK workers – Cadbury employs 46,000 worldwide and they will all be watching closely, looking for clues about their new masters.

Rosenfeld, who ranks sixth in the Forbes list of most powerful women, is thought to have been advised against visiting Bournville while anti-Kraft feelings are running so high. But that could turn out to be a strategy as risky as making promises she can’t keep.

Come on Irene. Hop in the corporate jet and face your new workforce.


Fiona Walsh writes for the Guardian newspaper in London