Nestle forced to reopen loss-making coffee factory
By Ambrose Evans-Pritchard (Filed: 27/08/2005)

A French judge has ordered Nestle to re-open a loss-making factory, delighting France's anti-globalisation radicals but setting a precedent that could scare away foreign investment. The Swiss food giant has been told to re-launch production at the chocolate and Nescafe plant outside Marseilles, employing 427 workers.

It was closed in June after nine years of mounting problems. Capacity usage had fallen to 30pc, chiefly due to falling demand for a strain of decaf coffee produced at the site. The profitable bits have since been switched to plants in Italy, Spain and northern France.

Nestle called the ruling "unbelievable and unprecedented", claiming that it abridged its basic freedom to manage its operations. "This plant has no chance of ever making money in the long-term. We offered all workers jobs within the group in other parts of France, or early retirement for those over 55," said François-Xavier Pellourd, the company spokesman.

The judge said Nestle had breached France's strict code on plant closures and questioned whether the move was justified on commercial grounds. Nestle said it would obey the court but denied breaking French law. "We have fully complied at every step of the way, even though it is an extremely long and complex process. We've asked the court to specify what the ruling means because we don't understand what we are supposed to have done wrong."

The French CGT union has accused the firm of a de facto "lock-out" to clear the way to shift production to cheaper facilities abroad. "Nowadays, it is prohibited to close factories in a savage fashion," said Elise Brand, the union's lawyer.

"Nestle claims that it is doing this because it has lost contracts. But it has not lost these contracts. The orders will be filled from its factories in Russia, Spain, or Portugal."

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__________________
'I have never let my schooling interfere with my education.'
-- Mark Twain

In heel Europa klaagt men over de te hoge werkloosheid en dus ook in Frankrijk, maar als dit de manier is om die tegen te gaan... dan denk ik dat we slecht bezig zijn.

Buitenlandse investeerders voelen zich hier niet meteen door aangesproken denk ik.

Net zoals in België zijn de Franse vakbonden oppermachtig, maar de vraag is of dat met nieuws zoals dit, nog lang zal blijven duren.

__________________
'I have never let my schooling interfere with my education.'
-- Mark Twain