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European Works Council: Report of Steering Committee Meeting, 14-15 September 2006

The report of this meeting is available in English Français Deutsch Español Italiano Svenska. Click here to see the slides presented at the meeting.

At the preparatory meeting, the union delegates gave country-specific updates on developments and raised common concerns:

Culinary
The Herta processed meats business is doing poorly in Germany and Nestlé is demanding substantial concessions on terms and conditions from the workforce as a prerequisite to investing in new product development and marketing initiatives. But the workers are justifiably sceptical about Nestlé's intentions and are demanding a clearer commitment and better assurances as to the future of the business. In France, however, the Herta business is doing extremely well, where it is a major contributor to revenues.

Chilled dairy
In France, the factories in the chilled dairy division are seriously under-capacity and all are anticipating a turn-around with the launch of the joint venture with Lactalis. Plans to sell the milk powder facility in Challerange - which had been suspended following the announcement of the joint venture project in December 2005 - are now back on track; if no other buyer is found, Lactalis will take over the facility in 2008. In Spain, following a long struggle, including a union mobilisation organised with the assistance of the IUF and supported by unions throughout Europe, the unions were able to secure the extension of collective agreements for two additional years; however Nestlé refused to negotiate a global agreement covering all four affected worksites.

Pet food
The future of the pet food factory in Quimperlé (France) remains uncertain. While Nestlé has considered the options of selling and of closing the factory, which produces both dry and wet (canned) pet foods, the unions have proposed an alternative plan to increase capacity in dry pet food production and re-commission the canned pet food lines for private label production. Nestlé, while not yet having commented substantially on the alternative plan, has declared its unwillingness to produce for the private label market. The company's observations on the growing competition from private label in the wet food segment in Europe and the trend in consumer buying toward private label, coupled with its clear refusal to enter this segment suggest that its other European wet pet food facilities may equally be at risk.

Confectionery
In connection with the news of the proposed restructuring of the UK confectionery business involving redundancies and production transfers, the delegates reiterated their support for the principles laid out in the NECIC Code of Conduct, specifically relating to the refusal to take on new production until negotiated agreements have been reached protecting the interests of workers at the factory losing the production.

The future of the Diósgyõr (Hungary) hollow-figure factory appears to be secure after a period of uncertainty linked to alleged complaints about quality from the major market for these products, Germany. The complaints appear to have ceased and Nestlé is no longer seeking to dispose of the factory.

A long period of uncertainty has ended for workers at the Elst (Netherlands) chocolate factory, but in this case, with the decision to close the factory. The Elst factory will cease operations on 1 June 2007 and production will be shifted to Zora (Czech Republic) and Samara (Russia). Anxious to avoid industrial action, Nestlé agreed to almost all demands put forward by the union. Under the terms of the redundancy agreement ratified on 13 September, workers who reach the age of 55 by the end of 2007 may avail themselves of a generous early retirement package; all others will have a salary guarantee until the end of 2008.

Globe
Problems stemming from Globe implementation continue to be flagged up by union delegates. In France, where Globe "went live" in June, there have been numerous system failures leading to problems in processing and delivering orders, items remaining out of stock, delayed payments. The complexity of administrative procedures means that process changes take 3 weeks to kick in, as opposed to 3 days in the pre-Globe era. Furthermore, the system doesn't take into account the constraints linked to the responsibilities of union delegates.

In response to these and other Globe-related issues (working environment, job security) raised in the plenary meeting, Head of Zone Europe, Luis Cantarell, considered that it was a question of "attitude" and brought up the example of Pakistan, where a positive approach and a healthy sense of competition ("we'll show those Europeans we can do it better") resulted in the successful implementation of Globe.