The Guardian May 9, 2001

Ruthless Arnotts sacks 600

by Andrew Jackson 

Another 600 Victorian manufacturing jobs are to go, with closure of the 
Arnott's biscuit factory at Burwood. Unions have reacted angrily to the 
slap in the face, with threats of industrial action and a consumer boycott 
against the company.

American transnational Campbells announced last Wednesday they plan to 
close the factory in suburban Melbourne, sacking 434 permanent staff and 
over 180 contracted staff from labour hire companies. 

They would then expand their facilities in other States, but only employ 
160 new staff. 

The Arnott's factory site in Melbourne's south-eastern suburbs is deemed 
prime housing real estate, and has been valued at $15 million. 

An outraged Victorian Trades Hall Council Secretary, Leigh Hubbard said, 
"This not only is a slap in the face to these 600 workers and their 
families, but to all Victorians. 

"No-one will feel comfortable picking up a scotch finger again. We are sure 
that consumer reaction will be expensive for the company. 

"Unions reject the decision and ask the company to reconsider its position. 
If the company persists with the decision we will investigate all means to 
make the future use of the land as difficult as possible, said Mr Hubbard. 

Redundancy packages for the 434 full-time staff have been guaranteed by the 
company, which is also offering "financial advice. However the fate of the 
180 contracted employees remains unclear. 

Mr Hubbard said it was his understanding that the factory was profitable, 
and that 40 percent of the produce made in the Burwood factory was consumed 
in Victoria. He said also that the industrial relations record at the plant 
had been good. 

"Today they are moving out of Victoria, tomorrow they could just as easily 
be moving out of Australia ... because they've discovered they can make an 
extra cent, said Australian identity, Dick Smith. 

Critical of what he claims has been the sell-off of "Australian icons such 
as Arnott's, Speedos and Vegemite to overseas interests, Dick Smith is now 
famous for marketing his eponymously named line of "Australian-made, 
Australian-owned products. 

However, the early expectations of the Victorian Government that Mr Smith 
would fly in on his helicopter and save the plant were unfounded. "I'm not 
an expert in the manufacturing business, he said. 

The Bracks Government has also spoken Arnott's competitors, Weston and 
Lanes, but all agreed that Arnott's would be unlikely to sell its factory 
to a competitor. 

Treasurer John Brumby claims it is "a big multinational company making a 
very bad business decision. 

True to the doctrine of hardline economic rationalism, Arnott's Managing 
Director Jon Doumani said the factory closure was part of a two-year 
overhaul the company was undertaking, and the plan was for fewer and "more 
flexible plants to help it retain its competitive edge. 

He said the overhaul, resulting in the net loss of over 340 Australian 
jobs, would help make Arnott's one of the "most sophisticated and 
innovative food manufacturers in the world. 

Speaking to the Victorian Parliament about the closure Mr Brumby said the 
decision had "everything to do with a valuable piece of real estate at 
Burwood, and nothing to do with the ... fundamental profitability of the 
Burwood plant. 

It has since been revealed that the Victorian Government had been informed 
of the Burwood factory closure nine months ago. At that time the Government 
wrote to Arnott's with a proposal for the company to expand its operations 
in the State, but apparently Arnott's did not respond. 

Arnott's was founded as a family business in 1865. The descendants of the 
founder sold the Australian company to the US multinational Campbell Soups 
in 1997. 

The great-granddaughter of the founder of Arnott's biscuits, Alice Oppen 
says she is dismayed at the closure of the factory. 

"I think the closure of the Burwood factory is an example of what can 
happen when you let multinationals come in and buy things, said Ms Oppen, 
who originally opposed other family members over the 1997 sale. 

"Everything is then about profit. It's all about money and not about staff, 
the knowledge, the quality, she said. 

The closure of Arnott's Burwood factory has also exposed one of the more 
offensive traits of Australian capitalism, where State and Federal 
Governments pour billions of dollars into the coffers of transnational 
corporations under the guise of "job-creation. 

In the Arnott's deal, the Queensland Government has admitted to offering 
Campbells "financial incentives to gain an extra 130 jobs for that State, 
even at the expense of the livelihoods of 600 Victorian workers. 

In all, Australian Governments now contribute to corporate profits under a 
variety of schemes to the tune of $6 billion annually, either in cash or 
lost revenue. 

This amount is being lost to our health, education and welfare systems 
where the money could be better spent by governments employing another 
125,000 people. 

Liquor, Hospitality and Miscellaneous Workers' Union (LHMU) Victorian 
Assistant Secretary Terry Breheny said the Arnott's workers have "nothing 
to lose. 

"It is our view that if the company does not give us a commitment that they 
will sit down and have some discussions with us, then we will be 
recommending to our members that they have some industrial action at the 
site to force the company to discuss the future of the plant, said Mr 

The LHMU is calling on its members to hold a huge rally at the factory site 
on May 12. Another community rally is being planned for a week later.

Back to index page