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                        "NECIC AD HOC MEETING"
               Nestlé Purina Petcare Europe –Quimperlé Factory
               Tuesday, 15 May 2007 – Hôtel Le Warwick, Geneva

 Management           A.M. Silva                    Vevey
                      V. Loertscher (Mme.)          Vevey
                      D. Cans                       NPP France
                      E. Lescaillet                 NPP France
                      M. Stanley                    NPP - Europe

 Employees            Claude Jehanno                NPP – Quimperlé (CGT)
                      David Le Doussal              NPP – Quimperlé (FO)
                      Didier Pérennec               NPP – Quimperlé (CFTC)
                      absent                        NPP Castiglione (FLAI-CGIL)
                      absent                        NPP Ijmuiden

 IUF                  J. Baroncini (Mrs.)
                      W. Endling

M. Silva opened the meeting at 10h.00 and welcomed the participants. He recalled
that following the announcement by NPP of the proposed sale of the Quimperlé
factory, the Central Works Council had developed a plan to maintain the site within
the Nestlé Group. The consultation process had begun and the ad hoc meeting had
been convened for that day.

D. Cans, Director of NPP France, presented the background to the plan, namely the
constant decline in canned pet food requiring adaptation of the industrial structure to
the market structure. Production had declined from 100KT to 20KT between 2001
and 2007. The Quimperlé site, canned and dry products, was more expensive than
other sites at a comparable level of utilisation.
The part producing dry products was the smallest NPPE production unit, more
expensive that the Marconelle site even at a comparable level of utilisation.

Key events :
In November 2005, NPP announced the plan to sell the Quimperlé site (canned and
dry pet food).
In 2006, the NPPF Central Works Council developed an alternative plan to avoid the
sale of the site.
Following several discussions, NPP explained at the end of 2006 the reasons why the
alternative plan could not be adopted and invited the trade union representatives to
discuss the future of the Quimperlé site. That invitation had twice been refused by the
trade union representatives.
The Central Works Council met on 21 March 2007 to discuss the following
points :
 development of the dry products part with an investment of €12 million
 closure of the canning part requiring transfer of production to the Aubigny,
   Ijmuiden and Castiglione sites
 social measures including a pre-retirement plan, internal mobility and voluntary
The Central Works Council agreed a timetable for 3 informal meetings which
concluded with the signing of an agreement at the end of April 2007.

D. Pérennec mentioned the importance of those informal meetings, to be taken as an
model for the future. D. Cans agreed.

The main points of the agreement were as follows :
 closure of the canned production unit on 30 June 2007 and transfer of production
   to other NPPE sites (date to be adjusted according to the transfer planning)
 transfer of employees from the canned production unit to the dry production unit
   from 1 July 2007
 the site would work 7/7 days under a specific agreement to be signed by end May
   2007. That would allow some 30 additional jobs to be maintained.
 maintenance of 138 jobs on the site, including 5 “European” jobs"
 pre-retirement plan for all employees aged 52 years or over at 31 December 2007.
 voluntary and compulsory redundancies - termination bonuses
 consultation timetable during May

Very few compulsory redundancies are envisaged in the light of the above measures.

The industrial plan :
 the Quimperlé site kept within Nestlé – in NPPE
 closedown of canned production at Quimperlé and transfer of production to other
   NPPE sites
 injection of €12 million for the development of the part producing dry pet food at
 planned increase in production to 95KT/year over the next 7 years (currently
   31KT/year) by installing a second extruder
    installation of a line for large format bags (1st month)
    finalisation of the investment plan (5th month)
    conversion to 7/7 day working (from 8th month), planned production capacity
       c. 50KT/year - with 1 extruder
    from 23rd month, with the second extruder becoming operational, planned
       production capacity c. 80KT/year to 95KT/year, with 7/7 day working.
Transfer of canned production from Quimperlé to Aubigny (c. 2,311T), Castiglione (c.
15,401T), Ijmuiden (c. 597T).

Questions / Answers

W. Endling asked about the impacts of transferring production to other sites
D. Cans said that bearing in mind the decline in the market for canned products of
some 10% per year, a European trend with an impact in all European markets, the
factories had the available capacity. There would therefore be no impact on the
organisation of work. The transferred production could be absorbed without creating
additional jobs.

J. Baroncini asked whether Nestlé envisaged any measures to prevent the decline in
consumption of canned products.
D. Cans said that NPPF was maintaining or increasing its market share for canned
products, which proved that efforts were being made to decline less/less quickly than
the market.

W. Endling asked about length of contracts, price pressures. He also asked what was
Aldi’s share of production of canned products in Europe.
D. Cans confirmed that contracts were annual, without any automatic extension. Aldi
was established in a certain number of countries but not all. The production for Aldi
was important for NPP in Germany, less so in France and Belgium. For NPPF, the
share of private label brands was a small proportion of overall volumes. The majority
of the brands were Nestlé brands.

D. Le Doussal asked about the future of the Aubigny site.
D. Cans noted that the Aubigny site was picking up part of the production from the
Quimperlé site. Aubigny manufactured small format cans (200g) and meal-sized
portions. Aubigny’s future lay in the production of unit sizes of 200g and then 400g,
depending on market trends. Once the plan had been completed, Aubigny would
remain the production site for wet pet food in France. NPP would defend its market
share as long as the market existed.

J. Baroncini asked about the prospects for the Castiglione and Ijmuiden sites. She
also asked about the fact that the Ijmuiden site produced cat food rather than dog food.
D. Cans said that those were sites which would continue to be subject to trends in the
market. NPP canned products were primarily aimed at cats. The Ijmuiden site was
essentially devoted to the production of canned cat food.

D. Pérennec asked if investments were planned in the Veauche site.
D. Cans said that various scenarios were possible and that it was intended to hold an
information and consultation meeting on investments at Veauche once the situation
concerning the Quimperlé site was settled.

W. Endling asked if the planned timetable would be implemented as it was and
whether the contract for the second extruder had already been concluded.
D. Cans said that the timetable (about 23 months) was standard and that it would be
fixed definitively once the legal procedures had been completed. He noted that 138
jobs at Quimperlé would be surplus to requirements once the production of canned
products stopped. The second extruder must therefore be operational so that all the
138 employees would have work and not be surplus. The order for the second
extruder would be placed as soon as the procedure was completed. One should allow

22-23 months from the placing of the order to the moment when the unit became

W. Endling asked if the Castiglione and Ijmuiden sites had spare production capacity
to absorb the transferred production or whether it would be necessary to envisage
investment to ensure that production.
D. Cans confirmed that the production capacity of the two sites would allow the
absorption of production without investment.

C. Jehanno asked for the mandate of elected representatives to be extended until the
conclusion of the social plan in order to ensure support for employees.
E. Lescaillet pointed out that a unit had been set up to provide employees with all the
necessary support. Depending on need, 3 to 5 consultants were available to answer
questions and provide the necessary assistance to employees. A monthly formal
meeting was planned to monitor that and to take stock.
D. Cans said that once the production of canned products had stopped, the activity
and responsibilities of the Works Committee in the canned products part, subject to
the applicable legal provisions, would cease. There would still be elected
representatives in dry products who would be available to employees joining the dry
products unit.

D. Pérennec asked what was Nestlé’s position concerning the work done and the
agreement which was in the process of being concluded.
A. Silva said that the final situation was indeed different from the situation initially
envisaged. He recalled that Nestlé’s purpose was not to close the sites but rather to
fill them. A good solution for the Quimperlé site had been identified as a result of the
discussions over the previous few months.
D. Cans recalled that the initial idea had been to find a buyer for the Quimperlé site.
However, as the potential buyer had not been able to propose a solution allowing the a
sufficient number of jobs to be maintained on the site, Nestlé had decided to change
course. The series of informal meetings in the framework of the process had worked
well, and had proved to be a real dialogue and not just a matter of lip-service.

C. Jehanno asked about the cost of the pre-retirement and redundancies.
E. Lescaillet said that the accounts would be available when the time came.

W. Endling concluded by mentioning that it was indeed possible to find solutions
together by means of real dialogue. He stressed the highly positive character of the
results achieved.
A. Silva agreed. He thanked the participants and closed the meeting at 11h.30.

Annex : presentation


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