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Welcome to my new blog , in which I will take a look at the business and HR facts and figures behind the FTSE -100 companies making the news.


Cadbury is in the process of being taken over by US cheese maker and all-round food giant Kraft. For anyone who has missed the details (or has switched off during the interminable negotiations and games of bluff that have taken place in the last few months), the Cadbury board has finally accepted a bid for the firm valued at around £11.5 billion. This means that shareholders have until 2 February to decide whether or not to accept the deal.

Notwithstanding the complaints of Warren Buffett, one of Cadbury’s largest shareholders – owning 9 per cent of Cadbury shares – the deal is almost certain to go ahead. Around 40 per cent of Cadbury’s shares are owned by US investors who aren’t likely to be swayed much by the “great British brand” argument, while another 20 per cent are owned by hedge funds that are only there at all because they hope to profit from the takeover. In fact, few shareholders of any kind will turn down the chance of a short-term profit – as the Cadbury board well knows, which is why it has finally seen the writing on the wall and accepted the offer (but not before a desperate search for another buyer to save Cadbury from Kraft’s clutches).

The big HR story in all this is the fate of Cadbury’s 4,500 UK-based staff, especially those at the firm’s historic site of Bournville in Birmingham. The union Unite certainly fears the worst, and some of these fears might be justified: Kraft has financed the takeover with borrowings of around £7 billion, a debt that will fall on the new firm and is bound to affect its financial priorities. There are some parallels with the Glazer family’s takeover of Manchester United FC – except that while the Glazers could make some of their money back by selling Cristiano Ronaldo, Kraft is more likely to seek a return on its investment by making “synergies” that include cutting front-line jobs.

But perhaps some of the pessimism has been overdone. Far from being a quaint British institution that is about to be swept away by a new tide of American efficiency, Cadbury is itself very international in outlook - it employs 46,000 people in 60 countries – and also very profitable (its last full year results showed a turnover of £5.4 billion and an operating profit of £638 million). Despite the philanthropic roots of Cadbury’s 19th century founders, the company has not up until now been run as a charity. If it was desperately uneconomic to continue making chocolate bars on these shores, then sentiment alone would not have been enough to preserve jobs this long. Instead, Cadbury is actually a British success story, and Kraft, while it clearly believes itcan enhance its profitability further, would be foolish to move in and destroy the foundations of that success. And before too many political points are made about foreign predators swooping on UK firms, it should be remembered that Cadbury has made its fair share of acquisitions over the years, including some American ones such as the Adams chewing gum firm it bought for $4.2 billion (£2.6 billion) in 2003. If a business is worth its salt, it is worth keeping - whatever the nationality of the owners.

An interesting footnote to the saga is that Cadbury’s chairman Roger Carr has called on the government to review its list of firms that enjoy state protection from overseas bids. Currently, only Royal Mail, BAE Systems and Rolls Royce enjoy this status. It would be stretching it to argue that chocolate-making is an issue of national security, but there are rumours that UK energy firms such as National Grid and Centrica are on the shopping list of Russian giant Gazprom. That would certainly raise some political hackles. Watch this space.
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Most years we can say: “A new year and a new European Presidency”. 2010 is very different - it is also a new decade. Further, it’s a new European Commission as well as a new European presidency (which, for the first six months of 2010, will be Spain).

We now have two new senior European posts. First, members states have created a council president, or “president of Europe” - held by the former Belgian prime minister, Herman Van Rompuy. The post has a very grand title for what is actually a mundane job. There will be inevitable confusion with the commission president Jose Manuel Barosso, creating a new version of an old proverb “too many presidents spoiling the broth”.

To make matters worse, the commission also has a new vice-presidential post entitled “high representative on foreign affairs and security policy”, shortened to “HR”. The UK commissioner Baroness Ashton was appointed to this role, and is now known as HR Ashton. Unlike the council president, whose job is bureaucratic, the high representative is charged with leading EU foreign affairs and creating an EU foreign office whose size and budget will dwarf the UK’s.

Whether the EU foreign service will amount to anything is a subject of much debate. Success will involve a Brit undermining our own national sovereignty in foreign policy matters, while failure - which is highly likely - will be laid at the UK door. Damned either way. One can only wonder what persuaded our prime minister to believe pushing someone into this post was a shrewd move.

Commissioners must pass “confirmatory hearings” with the European Parliament before their appointment. Not quite a modern day version of the old Roman games, but they still manage to produce a little blood. Pithy questions are supposed to be asked, but the truth is these are a political charade where the sensible course of action is to read up on your subject and give frankly anodyne answers.

Confirmatory hearings are a rude introduction to the politics of Europe. National political parties are aligned to the political groupings whose power dictates both progression and protection. The hearings have complex rules and candidates are expected to provide answers to written questions. Baroness Ashton, flummoxed by the question: “Should Europe press for a seat on the UN Security Council?”, answered boldly that she did not know and would have to check what the policy was. Truth, however, is sometimes misplaced and as a result of her honesty Ashton has had a very rough ride.

The commissioner of particular concern to HR professionals is László Andor from Hungary, who is responsible for employment and social policy. He may speak English fluently but his answers at the hearing were grey and devoid of controversy. Unlike Ashton, he knew how to deal with the difficult question. In responding to an accusation of being a communist that rejected globalisation, he replied that this was a “gross exaggeration” but that the allotted one minute to answer was not enough to respond. Now, that is how to respond to a question you do not like and get away with it.

So what can HR professionals expect from Andor? He gave little away and kept to the broad outlines of existing policies on employment and the fight against poverty and social exclusion. He identified the law concerning posting of workers and working time as requiring action (but only after a thorough impact assessment) and defended migration. No big surprises then. Andor is an economist by training and, aside from academia and working in banks, his only other work experience has been for the Hungarian trade unions nearly 20 years ago. Only time will tell whether this will cloud his judgment.
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