Union claims Unilever likely to shut down Birds Eye plant

Workers at Unilever fear more closures following flat first half-year sales, with the GMB union warning about the possible loss of 650 jobs at the Birds Eye plant in Grimsby.

Unilever said it was looking at options for the ready meals plant, including investment, sale or closure. It was doing the same for its red meat and potato operations at Lowestoft.

GMB regional secretary Andy Worth said that despite the union drawing up an investment plan and finding grant aid to transform the Grimsby site, Unilever was not interested. "This is not a company in trouble. Birds Eye generates £100m cash for Unilever year-on-year, with the Grimsby factory generating some £20m of that," he said.

"The company has said that lack of cash is one of its deterrents to investment. Yet it seems minded to spend in excess of £24m on closure in one year, rather than £6.4m spread over three years, which is the cost of implementing the locally-drafted investment plan."

Meanwhile, Unilever has asked for 15 voluntary redundancies on top of the 300 made last year at its ice cream factory in Gloucester.

It has denied rumours that it is to transfer fish finger production from Hull to Bremerhaven in Germany.

Some observers and shareholders have criticised Unilever for an obsession with cost cutting and inadequate promotion of brands.

Unilever had promised to finance investment in brands from savings from its five-year Path to Growth restructuring plan. It promised to save euro 700m (£463m) a year by the end of 2006.

Analyst Andrew Saunders at Numis Securities said Path to Growth had made Unilever a better business but had not achieved all its aims. "[Unilever] wanted to increase growth of brands by 5% but that hasn't happened. It has improved margins by 18%."

He said that shareholders saw strong sales as more sustainable than cutting costs. "They are frustrated with the story at the moment and they want better evidence of Unilever getting its brands into growth."

He said that Unilever would struggle with frozen foods where growth of 1-2% was the best it could expect. The spreads market was also difficult.

Unilever put flat sales of ice cream and ready-to-drink teas down to the weather.