Published: 04/10/2009

Members of the IUF-affiliated SIPTU, which organizes workers at Coca Cola HBC Ireland, have been on strike against the outsourcing of 130 jobs at five distribution locations since the end of August. In June, workers we given a “choice” by management: accept a reduction in terms and conditions amounting to up to 40% , or be transferred to a third party provider on similarly reduced terms. A first “welcome message” from the employer-to-be already announced upcoming redundancies.

Faced with the denial of good faith negotiations and the obviously inferior conditions at the third- party providers, SIPTU served strike notice on August 20. Despite having filed legal notice of an industrial conflict, the workers were sacked while on the picket lines on September 8. But the struggle continues.

The Labour Court ruled on September 18 that the company should follow the previous pattern of negotiated redundancy packages with SIPTU as well as undertake jointly with the union a feasibility study on retaining jobs. Coca-Cola Hellenic (CCH) rejected the recommendations as too “costly”, claiming that its offer was already “extraordinarily generous”. According to SIPTU National Industrial Secretary Gerry McCormack, the company “had gone overnight from being a good quality employer where there had never been a strike to “aligning itself with the worst practices in industrial relations in Ireland”

This most recent outsourcing initiative is part of a ruthless HBC assault on its workforce. The attack on jobs comes against a background of high growth in many CCH markets in recent years, including a successful crisis year 2008, when profits still reached €425 million and dividends were increased by 12%. When the share price slumped in 2008, CCH management determined to restore it through severe restructuring. In Poland, 150 jobs were slashed, 550 jobs were eliminated in Romania through cuts and closures, and the plant in Bari, Italy will be shuttered. In Austria, full outsourcing of distribution was only stopped by strong union opposition.

Overall employment has been cut by almost 3000, from 47,777 in the first half of 2008 to 44,865 in the first half of 2009. CEO Doros Constantinou announced a €310 million operating profit and 200 million net profit for the first half of 2009 by stating “We were delighted to see the benefit of our cost saving initiatives, together with lower commodity costs, contribute to a solid operating profit performance“.

A second pillar of the CCH strategy to continue to deliver “shareholder value” in the crisis is returning cash to investors. In April 2009, the company announced an ambitious share buy back program. For several months HBC published almost daily press releases announcing share purchases of up to several hundred thousand euros.

On September 18 – the same day as the Labour Court hearing in Dublin -, CCH announced a “capital return” which would directly funnel €548 million in cash to shareholders – more than 4 million euros for each of the 130 outsourced Irish workers. The recapitalization, according to the company press release, “will be financed through a combination of accumulated cash and new debt.”

In the quest for ever greater returns to investors, the company is taking on new debt to pay out cash. Debt-to-equity ratio now stands at close to 65%. Workers pay the cost.

Investors certainly approve – the share price has climbed to 26 euros from a March low of less than 10. Irish workers, however, are not the only ones outraged by the actions of a company that dishes out gobs of cash to shareholders while slashing jobs. CCH workers throughout Europe and from Africa have expressed their solidarity by protesting to CCH management. So too ha the Coca-Cola Workers Alliance Steering Group, uniting major Coca-Cola Unions around the world, and union conferences in South Africa, Germany, and Canada. All have condemned the company’s actions and called on CCH to reach a negotiated settlement with SIPTU.