In mid October 2007, staff at the Unilever plant in the Netherlands went on strike for over three weeks in protest against the group’s plan to close three of the country’s six Unilever plants. The trade unions believe that the closures are unnecessary and are calling for job guarantees for employees currently facing dismissal. An agreement was subsequently reached, specifying that redundant staff would receive dismissal compensation, while offering job guarantees until 2010.
By early November 2007, staff at the Unilever plant in the Netherlands had been on strike for over three weeks, protesting against the company’s reorganisation plans. Over the next three years, it is envisaged that the company’s intended worldwide reorganisation could result in the loss of some 20,000 jobs at Unilever – the household, personal care and food product company; this would amount to over 10% of the workforce. In the Netherlands, some 470 jobs are at risk at the Unilever plants, representing 11% of the group’s Dutch workforce. The latter job cuts would result from the closure of three Unilever establishments: the Calvé plant situated in Delft in the province of South Holland, Cif located in Vlaardingen also in South Holland, and Knorr situated in Loosdrecht in the north. The production will mainly be transferred to eastern European countries.
Management justifies proposed plans
The trade unions are outraged by this reorganisation plan and are opposed to what they see as ‘a policy of erosion’. Unilever’s policy appears to focus on optimising short-term returns. According to the unions, this poses a threat to business continuity in the Netherlands. However, the company asserts that there is surplus capacity and that production is inefficient at all three establishments. Production will be transferred to the country’s second largest city, Rotterdam, in the south and to other plants in Europe where production is less expensive. Unilever hopes that the cost reduction efforts will strengthen its competitive position, address the issue of surplus capacity and accelerate growth in Europe. The company does not anticipate further reorganisation before 2010.
Job guarantees term-linked
In response, the trade unions are calling for three-year job guarantees for the 470 plus employees who are set to lose their jobs in the Netherlands. Management believes that the proposals taken up in the redundancy plan are sufficient, and is offering job guarantees until 2010 for production staff and until April 2009 for non-production staff.
Fear of further closures
While the company claims that it will do its best to provide job-to-job supervision for the employees, it says it cannot rule out compulsory redundancies. The Allied Unions (FNV Bondgenoten) has cast serious doubt over Unilever’s commitments, since the company will no longer be investing in its workforce or machinery in the Netherlands. Moreover, suspicions have been raised among the company’s workforce that Unilever could close other establishments at any point. For years, the workers have been under pressure to increase production efficiency in order to protect their jobs. FNV is also fearful that more establishments will be closed, despite the fact that they are profitable and efficient.
Shareholder interests prioritised
As the growth rate is still deemed too slow for the Unilever group, the company insists that it intends to cut costs. However, the trade unions argue that the group is not in difficulty in relation to costs. The unions blame Unilever for simply translating the limited growth into increased pressure on costs. However, the lowering of wage costs will have very little effect, representing only 3% of the total costs per production unit. Moreover, the Dutch plants are running efficiently. Thus, it is argued that Unilever merely wants to satisfy the short-term interests of shareholders, who are not concerned with employment opportunities in the long term. In 2007, the employees and trade unions developed plans on the basis of which they believe the continued survival of the Dutch production establishments could be guaranteed. Nonetheless, Unilever has rejected these plans.
Strike action ends in agreement
Ten days into the strike, management made a gesture to the trade unions stating that no forced redundancies would take place before April 2009. The group also said it wanted to enter into discussions with the unions concerning supplementary measures to provide supervision for employees in finding new positions. However, the unions are continuing to uphold their demands: namely, job guarantees or a firm commitment that no forced redundancies will ensue.
In mid October 2007, strike action began at all six establishments, with employees staging a demonstration at head office. In the meantime, rotating strikes took place at the six plants. Each day, work stoppages took place at one of the establishments without prior notification, costing the company at least €1 million a day.
Finally, on 5 November 2007, an agreement was reached specifying that redundant employees who cannot be placed elsewhere in the company, or at another company, would receive dismissal compensation based on the number of years’ service with the company. Employees who cooperate with the closure of the plants will receive a bonus, while employees at the three remaining plants will receive job guarantees until 2011.
Marianne Grünell, Hugo Sinzheimer Institute (HSI)