French Government Backs Nestlé over Job Cuts

September 22, 2004

The French government is siding with Nestlé in a stand-off with France’s second-largest trade union over planned job cuts at Perrier and Nestlé’s other French water brands.


In a statement, finance minister Nicolas Sarkozy put pressure on the CGT union to resume talks on implementing a program of voluntary layoffs to reduce the cost of producing Perrier, Contrex, Vittel and Quezac.


Nestlé said last week that it planned to sell the Perrier unit after the CGT vetoed the July accord ratified by the company’s other unions.


The sales threat caused consternation in France. Although Swiss-owned, Perrier has been bottled since 1863 at its source in Vergeze, southern France, and remains a potent national symbol.


But Sarkozy said Richard Girardot, chief executive of Nestlé Waters France, had agreed at a meeting between the two men to retain the Perrier plant and nearby glass factory "in the context of the implementation of the July 29 agreement."


That deal provides for the early retirement of 1047 workers, of whom 276 would be replaced.


The Communist-backed CGT had been pushing for 100 more new hires and now has to choose whether to drop its demands or hold firm and risk being blamed for a Perrier sell-off — which could eventually pave the way for the global brand to be produced elsewhere.

Source:

The Scotsman

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