Usdaw national officer Daniel Adams said Müller had confirmed with the union that, based on current trends, the factory most likely at risk was its Foston site. That followed Müller's announcement last week that it was considering closing one of its dairy sites as part of its Project Darwin cost-cutting and margin improvement programme, although a firm decision would not be made until the review was complete, it said.
“While Usdaw recognises the ongoing challenges within the dairy sector, this news is a devastating blow for a loyal and hardworking workforce,” said Adams. “Even more galling is that the trade unions, earlier this year, had to take the extremely difficult decision to pause the pay negotiations in an attempt to protect jobs.
“Usdaw will now enter into collective consultation at a national level to interrogate the company’s business case, exploring all alternatives to closure and doing everything we can to mitigate the potential impact that the company’s proposal could have on staff at the site.”
The union will meet next week to discuss the next steps for safeguarding the livelihoods of its members affected by the potential closure.
Usdaw has also demanded an urgent joint meeting with senior management at Müller Milk & Ingredients and Culina Group over the dairy giant’s plans to move management control of its distribution operation to Culina.
“There is no doubt that this announcement will create further uncertainty within the workforce,” added Adams. “Usdaw will not stand idly by should this be a prelude to full outsourcing or an attempt to attack members’ terms and conditions of employment.”
Unite said it was also keeping a close eye on proceedings. While the union did not have any members working at the sites affected by the review, it did have a number of members who make deliveries to and from the plants.
National officer for road transport Matt Draper said: “We will engage in a constructive fashion with this review and monitor its outcome very closely. It is too early to comment in detail on this process, but to reiterate that our top priority will be to protect our members’ jobs, pay and employment conditions.”
While the outcome will not be determined until the review has been completed, Müller said a factory closure might be necessary to bring capacity into line with current and future customer requirements. The six dairies under review are Bellshill in Scotland, Manchester, Foston, Droitwich, Severnside and Bridgwater.
‘Address potential over-capacity’
Chief executive Patrick Müller said: “It is a matter of considerable regret that we must consult on steps which could result in a restructuring of our dairy network and capacity, but we must ensure the sustainability of our business and address potential over-capacity in our network.”
Julian Wild, partner and head of food at Rollits, said that Müller closing one of its dairy processing sites would be the standard approach of any company looking to cut costs.
“The standard approach to cost-cutting is to close a factory and ‘rationalise’ production,” Wild told Food Manufacture. “This is driven either by falling volumes – meaning companies have too much spare capacity – or by technology improvements resulting in newer sites being more efficient than older factories, or by a particular facility being in the wrong place.
‘Cutting cost, reducing losses’
“I’m sure that Müller’s review will consider all of those things, but the long and short of it is that they have to find a way of cutting cost and reducing losses. Ultimately, the answer has to be fewer, highly efficient, technically advanced dairies close to motorways and people. That’s usually in the East, whereas most of the cows are in the West.”
Industry expert Paul Wilkinson said: “This seems to me to be business as usual in so far as the inevitable drive to create fewer bigger sites is almost a must in commodity markets. I am surprised they needed to go public in this way.
“For Müller, having built their business through acquisition the imperative to rationalise production is almost a given. Separating processing from logistics also makes sense to ensure skills and focus are optimised.”