Announced Sale of Unilever Frozen Foods Division Highlights Accelerated Job Destruction by New Financial Investors

Posted to the IUF website 02-May-2006

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Unilever's February announcement that it would be putting its Birds Eye Frozen Foods Division up for sale evoked instant uncertainty on the part of workers and trade unions - and instant glee among potential investors. Within days, at least ten private equity funds specializing in the acquisition and rapid turnover of non-financial assets expressed interest in making offers.

In the UK, the GMB, which organizes workers at three Birds Eye plants, immediately announced that it was requesting meetings with management to discuss issues including job security, pension rights, and industrial relations under a new owner. The implications of the sale of the company's flagship plant in Lowestoft were also quickly seized on by local Labour MP Bob Blizzard, who said in Parliament "The Lowestoft food factory is one of the most efficient and productive in the country. It received factory of the year and manufacturer of the year awards last year. May we hold a debate on food processing in this country, so that we can understand what is going on in that industry?"

Why is Unilever divesting a hugely efficient and profitable plant to raise cash purely in order to boost "shareholder" value? What are the consequences for workers of the massive irruption of new forms of finance capital like private equity funds into the food processing and other industries in the IUF sectors? What is going on in food processing when a major force like Unilever disinvests in actual food production to boost share prices and dividends while selling much of its productive capacity to purely financial investors with no commitment to food? What does it mean for collective bargaining when job destruction rather than productive investment becomes the quickest route to profit?

These and related questions are addressed in a compact paper which the IUF has prepared for the ILO journal Workers Education for publication in June, 2006. To read Financialization: New Routes To Profit, New Challenges For Trade Unions (in pdf format), click here.