Danish meat giant Danish Crown last week announced the first elements of a plan which aims to ensure competitiveness throughout the value chain, also in the future.
Under the name DC Future, employees at the Danish Crown head office in Randers, Denmark, were informed of the plan's initial measures, which this year include a pay freeze for all employees who normally negotiate their pay every year.
"Our owners are also our suppliers, and we must ensure competitive settlement prices for them. Otherwise, jobs are going to be lost in Denmark," says Kjeld Johannesen, CEO.
Most Danish Crown employees in Denmark are paid by the hour and employed under a general wage collective agreement. They are covered by a three-year agreement, which this year is resulting in increased costs of just over DKK 120 million (€16.1 million) for Danish Crown.
"We are, of course, going to honour the agreements made – this sort of thing goes both ways. However, we are at the same time looking at cost increases which none of our foreign competitors are facing, and for this reason pay increases must be balanced by rationalisations and increases in productivity if Danish Crown and thereby jobs are to be safeguarded," Johannesen added.
The pay freeze is part of a broader package, and over the coming weeks the Danish Crown group must decide what other measures to implement under the DC Future plan.
"We are working on the early stages of the budget for 2009/10, and a lot can be gained by taking a smarter or fresh approach to things. However, I cannot rule out the possibility that we may have to look at the number of employees, also in administrative functions."
He is unable to say exactly when the next announcement will be made, but the Danish Crown management is hoping that the process will have progressed some way before the end of March.
"I appreciate the fact that his may be a cause for concern among employees, but we have decided to be as open as possible about this process, he concluded."
• Danish Crown