From our standpoint, the worst horror story regarding business offshoring strategy is the conflict that opposed Unilever and its French subsidiary Fralib, producing teas and infusions near Marseille, in South of France, about offshoring the Lipton-Elephant tea plant in Poland.
In 1972, the Anglo-Dutch multinational consumer good company Unilever purchased Elephant, a French brand of herbal teas, which has existed since 1896.
In 2010, after some declining profits, Unilever decided to close the Fralib plant, which managed the Elephant-Lipton tea production, to relocate its tea manufacture in Poland. As a matter of fact, Unilever said that the Gémenos plant “accounted for 27 per cent of the costs of its four tea plants in Europe, while making up just 5 per cent of production”.
The plant closing implied the dismissal of 182 people. To save their jobs and prevent the dismantling of their plant, workers have occupied it for 1 336 days. Unilever proposed three redundancy packages which all have been refused by Fralib employees who were convinced by the possibility to put the factory back to work.
In May 2014, after a two-year battle in the factory, the media, the courts and even in the French President François Holland office, where some Fralib workers were received, Unilever gave in and paid about 20 millions euros to Fralib for the employees and the creation of a tea cooperative named Scop-ti. Thank to this, the factory will continue to produce tea and about sixty jobs will be saved.
However, Unilever refused to cede the brand Elephant, which was born and well established in the region. Moreover, the opening of the Scop-ti cooperative is not determined yet. This offshoring strategy has been expensive for Unilever but also tarnished the brand image. French people were encouraged to boycott Unilever product to support the workers who were fighting for their jobs.
The Fralib case is not an isolated one and points out the dangers of globalization on employment, increasing social conflicts and questioning the role of trade unions.
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