Amusement

[andrewducker]

Name the following business.

It has a workforce of 39,000 outside the UK, with just 6,000 staff in Britain.

Its biggest business is chewing gum.

The focus of much recent investment has been Poland, to replace UK production.

And 50% of the business and management came from the takeover of the confectionery company Adams from an American drugs business some five years ago.

Who is this faceless, heartless global conglomerate, which opportunistically shifts its capital and people to wherever the financial returns are greatest?

It's Cadbury.

From

Comments

[andlosers.livejournal.com]

If LJ had a "like" button I'd have clicked it.

Exactly. All this pro-Cadbury anti-Kraft nonsense I'm seeing everywhere is incredibly naïve about how businesses work.

[chuma.livejournal.com]

Name another business that built housing for its staff around the plant so that living conditions were acceptable and kept jobs in the midlands for decades? Most of the stats quoted above are as a result of its success and taking over other companies rather than changing how they treat current staff.

I will accept that they always had the intention to move one of their premises to Poland. This is disappointing, but it wasn't something hidden or lied about, unlike Kraft who assured the government and shareholders they would reverse this as early as last week without any intention to do so.

[henriksdal.livejournal.com]

I'd like *this*

[a-pawson.livejournal.com]

Unilever, Rowntree, Wedgewood. Those are probably the only ones still going, but quite a number of manufacturing companies did so in the late 19th / early 20th century.

[chuma.livejournal.com]

Rowntree no longer exists, but yes they are also good examples, but I think you will agree they are also rare? Plus Cadbury's still own those buildings for staff and they are still used and have to be kept in a look in keeping with the rest. It's kinda quaint, but it also reminds me of a company that cares about it's employees. In contrast, I'm always suspicious of US companies where employment law is a dirty couple of words.

[a-pawson.livejournal.com]

I know what you mean, I have a few friends in the US and from their experiences and general working conditions, I wouldn't wish to have a job there in a million years. As for the housing, most people think Kraft will look on that employee housing as a disposable asset. Selling it whilst the factory is open would provbe difficult, but close the factory and it becomes much easier.

[marrog.livejournal.com]

I thought Wedgewood went bust last year?

[a-pawson.livejournal.com]

They entered administration, but the business survived and the factory was still open last week when I drove through Stoke.

It is now owned by a US private equity firm I believe.

[broin.livejournal.com]

Buy Brit... ish?

[henriksdal.livejournal.com]

how is any of that faceless/heartless? Is it Ringtons?

[andrewducker]

Shifting production from a rich coutnry is generally seen as being heartless (I strongly disagree - I think it gives jobs to people in poor countries), and being a multinational generally goes along with being faceless, but that's just the usual anticapitalist namecalling.

[chuma.livejournal.com]

People aren't worried about Kraft moving jobs from UK to Poland, they are worried about them shutting up shop in the UK completely and moving it wholesale to the US.

[andrewducker]

I'm not sure what they'd gain from that, to be honest. Do Americans work that much cheaper than the British? Or, indeed, the Polish?

[chuma.livejournal.com]

Centralisation mainly, and if their own plants can make the products they now own then why would they need ours? In reality this is more long term and a lot of people will start to forget about the take over when anything like this (or even moving some to poland) happens.

[henriksdal.livejournal.com]

No more curly-wurlys? :(

[a-pawson.livejournal.com]

I doubt they will make any dramatic changes to the products. Chocolate in the UK is very different to that sold in the US. Generally people like what they are used to, hence why many Brits find Hershey bars etc. unpleasant.

[henriksdal.livejournal.com]

This is a much nicer answer than the usual "English chocolate is SHIT" rants I hear. :)

hurrah! Curly-wurlys for everyone!

[chuma.livejournal.com]

Compared to Hershey bars, Cadburys is the stuff of legends.

[a-pawson.livejournal.com]

Not entirely. The threat of outsourcing to eastern Europe is a real threat, far more so than moving operations to the US where employment costs are comparitively high. Part of the problem is that Cadbury historically was extremely loyal to the UK and provided conditions & benefits for its employeees which were far better than those provided by most other companies.

[chuma.livejournal.com]

I would never call that a problem :)

[a-pawson.livejournal.com]

OK poor wording on my part. It's not a problem, in fact historically it was probably a good thing. Of course had Cadbury never done this, I suspect there would be less of an outcry today.

[woodpijn.livejournal.com]

Personally I don't much mind where they're based, but I'm concerned that Kraft will backtrack on Cadbury's fairtrade commitments.

[a-pawson.livejournal.com]

I just discovered they own Green & Blacks. Had no idea.

[henriksdal.livejournal.com]

I bet people were more upset when Nestle bought Rowntree, but no-one gives a sh*t about that nowadays. I feel slightly disappointed that Cadburys got sold, because we'll lose more of the world I grew up in - it's just sentementality, which is a fairly normal human emotion. I'm sure we'll have all forgotten about it by next month.

[andrewducker]

I'm sure something shiny will have distracted most of us.

What I mostly want is the government to provide retraining to people that lose their jobs, and provide grants to help new businesses start in areas with high unemployment. Which they do some of, but more would be good.

[marrog.livejournal.com]

I was sad because I had to start boycotting fruit pastilles.

[matgb]

no-one gives a sh*t about that nowadays

I do. I haven't (knowingly) bought a Nestlé product for over ten years. Given they keep expanding their product line this can be difficult (Buxton mineral water, FFS).

I love Kit Kats (well, I did ten years ago), and kinda like Rolos.

I now live just down the road from the main Mackintosh factory, which was also aquired at the same time, but I don't buy any of their products.

It really annoys me that a formerly brilliant ethical(ish) employer/business is now part of Evil Inc.

Many people will have forgotten about it. Others won't. In this case, however, I don't actually care about the takeover hugely, as long as the quality products within the line (esp Green & Blacks) remain actually quality.

It makes market positioning sense for this to happen, but Kraft have been known to make some pig ignorant business decisions.

But if they do, someone else can do what G&Bs did and set up to sell something I like again.

[momentsmusicaux.livejournal.com]

It gives jobs to people in poor countries, but it means we get cheap shit simply as a result of an economic gradient. I think that's a morally dubious thing to do.

[andrewducker]

It's not morally positive or negative. Keeping the jobs from the poor people on nationalistic grounds would strike me as incredible morally dubious, if not downright evil.

[momentsmusicaux.livejournal.com]

I think the nationalistic grounds are wrong too.

But what happens with outsourcing to poor countries is that we profit from the imbalance. For starters, it's not sustainable, as eventually (one would hope) developing countries will develop, and be at the same level of us. I can see that it's putting money into that country, and providing them with jobs -- but the fact that we profit from their cheaper labour seems wrong to me.

[andrewducker]

Well, the alternative is that be don't buy from them, and then they never improve.

We _can_ offer them more than they'd "naturally" get from a simple capitalistic transaction, and that's where Fair Trade comes in, which I generally approve of.

[lizzie-and-ari.livejournal.com]

Surely the alternative is that a company decides how much labour is worth to them and they pay that, whether the labour be sourced in the UK or on the Moon?

[andrewducker]

Because there is no natural price for anything. There's no "right" price. Things are worth what people will pay for them.

[andrewducker]

Also, if a company in India pays £5/hour for tea pickers (the UK minimum wage) and another pays the average Indian wage (above 60p/hour, if my calculations are correct) then the second company sells its goods for half what the first one does, and the generous company goes out of business very quickly.

[0olong.livejournal.com]

There are a number of reasons to be wary of being too ready to export jobs, though, none of which strike me as exactly nationalistic.

1. If we end up killing productive industries in Britain, we're effectively locked into having to import products. If conditions change and it stops being economically viable to import that stuff (for instance, 'foreign' workers are no longer available at rates massively below what we'd accept in Britain), we're pretty much fucked.

2. Importing goods is environmentally unfriendly (and in the case of food, often results in lower-quality goods because they have to travel further). This cost is often not (adequately) reflected in the monetary price. This is another reason to be wary of reason 1. - it seems likely that better mechanisms will be put into place later to reflect the true costs, whereupon we may be stuck paying more or accepting inferior goods because our own industries have been sacked.

3. As momentsmusicaux suggests, there is a case to be made for viewing with some suspicion the morality of an arrangement which is built on workers in other places being paid vastly less than British ones. But as you've already countered, this one is particularly complicated...

[missedith01.livejournal.com]

There'll be a lot fewer staff in the UK by the time Kraft have finished with it.

[andrewducker]

In which case I will be happy for whichever lucky workers do end up with jobs.

[missedith01.livejournal.com]

Whereas my glass will be half-empty for the workers who are redundant.

[andrewducker]

Oh, it's always sad when people lose jobs. But it's a fact of life. Nobody has a right to a particular job, and I have a loathing for nationalist idea that British jobs are better than the jobs of any other country.

[momentsmusicaux.livejournal.com]

Indeed. The common notion is that people need jobs. I disagree. Stuff needs to get done, and we apportion that to people. If less stuff needs to get done -- hurrah! Let's all take an extra day off and let the robots do things.
(Of course this necessitates either people being paid a living wage, or not having money at all...)

[andrewducker]

We only have jobs for things robots are shit at. When robots can do things we want, more cheaply than people can, those jobs cease to exist...

[johncoxon.livejournal.com]

But employing more British people would mean more workers paying income tax which I think would be beneficial to the British economy. Nothing to do with nationalism, just a healthy regard for the economy in which I live.

[missedith01.livejournal.com]

You beat me to this post.

I do not think that a British person has more right to a job that a person of any other nationality, but I live in the UK, and self-interest means that I want there to be jobs for people who live here like me to do (whether they are British, Polish, Indian or whatever).

I believe our society works better if there is work for everyone who needs or wants it. It will work less well the more people are excluded from work. If enough of us don't have work then things which I think are vitally important will disappear - the NHS, state education, the welfare state - they only exist because enough folks (again, of any nationality) work and pay their taxes here.

It's unrealitic to say, there is this amount of work to do and it doesn't matter who does it - that would be true if we didn't have capitalism.

[andrewducker]

This works much better for me if "our society" includes the whole world, and not one small island.

[johncoxon.livejournal.com]

Unfortunately, living in a fantasy land doesn't make for good economic views. We live in Britain and that will not change in our lifetimes (unless you move, I guess!).

[andrewducker]

I don't live in a fantasy land. I live in a real world, with open borders for competition, where people aren't banned from selling their work all around the world, where international laws and treaties prevent us from engaging in protectionist behaviours, and where huge numbers of studies have shown the advantages of international openness over engaging in a "Fuck you, you can't play with our toys" attitude.

[johncoxon.livejournal.com]

But in which having a strong national economy is still an advantage, as opposed to your fantasy, in which it is not.

[andrewducker]

I'd like you to quote the line where I said that having a strong national economy is not an advantage.

[johncoxon.livejournal.com]

It means that I have a higher chance of being able to find work because there are more jobs created by the higher amount of money the scientific community will receive as a result of a government unafraid to spend money because of a healthy economy. Thus, I think that until the above is different and spending in certain areas isn't correlated to economic health, I'll just have to disagree...

[andrewducker]

But why do you think I'm against the economic health of the country? As I pointed out above, economic opennness is correlated with healthiness of the economy.

[johncoxon.livejournal.com]

I don't, I think you're living in a hypothetical situation in which an American company taking over a British one resulting in British job losses somehow doesn't negatively impact on the British economy.

[andrewducker]

I'm talking about the bigger picture - where sometimes we lose jobs to them, sometimes they lose jobs to us, and overall the number of jobs and size of the economy are both improved by the freedom to move companies, jobs and money around.

[johncoxon.livejournal.com]

I think that you're right in that respect but I still don't think the Cadbury takeover, in itself, will not have a negative effect on our economy.

[andrewducker]

I think you're right about this case not being good for our economy, at least not in the short run.

[johncoxon.livejournal.com]

Don't you love violent agreements?

[andrewducker]

Absolutely! Bastard!

Actually, one of the reasons why I'm happy to have these kinds of discussions with people I know is that they do so frequently turn out to be agreements of some kind - where the confusion is over semantic things. The other major one is that I trust people on my friends list to be acting in good faith - you wouldn't be arguing with me unless you thought I was wrong, and had some kind of reasoning behind that, you're not just picking fights for the hell of it.

[matgb]

More people employed in palpably inefficient jobs means lost opportunity costs.

People tied up in crap jobs means they're not able to go off and do better jobs elsewhere.

For better, don't interpret that as better paid, or better for them, merely more efficient economically.

Which is why, for example, the typical Brit is twice as well off in 2007 than they were in 1977, after taking into account inflation, and we were at almost full employment (so much that we were heavily importing labour to make up the shortfall).

We, as an economy, are better off with robots and poorer nations doing the crappy lower end factory line jobs, freeing us up to do better things.

(nb, I state all of this despite having been effectively unemployed for about 18 months now and living at below the poverty line).

I like having a healthy regard for the economy in which I live. Which is why I spend a lot of my free time reading lots about economics.

Ricardo's theories of comparative advantage remain true to this day. They just need interpreting properly. I like buying goods from poorer countries, it makes us all better off, imports, after all, are what makes us rich.