When Kraft's takeover bid was approved by Cadbury management, our old cyber-buddy Andrew Leonard at How the World Works poked fun at yours truly for being a protectionist in disguise. Hey, if I can dish it out, I guess I should take it, too! The only quibble I have with his otherwise informative and entertaining post--you don't become one of the world's top globalization bloggers for nothing--is that he didn't mention our Mandy as he is so little known Stateside. This, of course, despite him effectively running the British government as demonstrated by seemingly having an imprint on every major policy decision in what are likely the dying days of New Labour. If you are still unfamiliar with the most powerful unelected official on the face of the Earth, I beseech thee to read up [1, 2] on the canniest British politician extant.
At any rate, it seems His Lordship is becoming increasingly miffed with Kraft's CEO, Irene Rosenfeld. In a BBC interview, he expresses annoyance with Rosenfeld not disclosing her intention to shut down Cadbury's factory in Bristol. Meanwhile, the Evening Standard dutifully chips in:
Mandelson's rage at Kraft's apparent volte face over the closure of the Cadbury factory at Somerdale is something to behold. He's taken to the airwaves to denounce the behaviour of Kraft boss Irene Rosenfeld, after he met her. “It would have been more honest, more straightforward and straight dealing with the company and its workforce and also with the government, if she had told me what their intentions were,” he fumes.So His Lordship will have to suffer these double-talking Yanks gladly, eh? Well, perhaps not. Surely at Mandelson's instigation, Somerdale is being hauled to appear in the House of Commons in the coming month:
Bless. What did Mandelson seriously expect? Firstly, did he ask her to specify what she was planning? City Spy suspects not. And when did he actually see her? Only when the takeover was effectively a done deal. All the cards belonged to Rosenfeld when she saw Mandelson. The Cadbury shareholders were in the bag. She did not need to make any meaningful promises, not least because she wasn't requiring anything from the government.
Lord Mandelson says he will remind Rosenfeld of what she said - that decisions on factories and the workforce would be made over a three to six month timeframe - “and bring her back to the undertaking of consultation that she gave when I met her”. But what, exactly, can Mandelson do about it? Er, apart from give her a piece of his mind he can do precisely nothing. In Kraft's Illinois headquarters, they must be having a right old laugh.
Before its bid was accepted, Kraft told the BBC: "We believe we would be in a position to keep the Somerdale plant operating and we are sincere about that." However it now says that it only become aware of how advanced plans for the new Poland factory were after the takeover deal had been agreed.It will certainly be interesting to see if these MPs are sufficiently angered with these Yankee interlopers to break up the deal even if it's rather unlikely. My best guess is that Kraft will make some labour concessions to just be done with it and move on.
[Business select committee chairman] Peter Luff said the committee would look at "everything to do with the takeover bid, including its dealings with the government. The government opposed the bid, then embraced it and then Lord Mandelson criticised Kraft for closing the factory," he said. "I think it's time for Kraft to give the assurances they've been giving in private to politicians in Parliament. It's been a very controversial bid. I think we would be failing in our duties if we didn't get Kraft to clarify their position."
And speaking of moving on, Lord Mandelson (surprise!) finds himself in the centre of yet another imbroglio of international dimensions. Although hotly denied by the Emiratis, Dow Jones newswires launched a bombshell a few hours ago suggesting the powers-that-be in Dubai are preparing to give foreign creditors a haircut on their lendings, which may be set at 60% of face value (or a 40% haircut in trader lingo). Ever the jet-setter, a certain someone has been shuttling back and forth between London and Dubai to salvage a workable deal on the latter's defaults:
Dubai World may offer creditors 60% of the money they're owed backed by the sheikdom's government as part of a deal to reschedule $22 billion of debt, people familiar with the matter told Zawya Dow Jones. The offer, which pays no coupon, will come with a sovereign guarantee when eventually presented to creditors by April, the persons said.As if the UK banking industry needed any more trouble, the FT reports that plentiful loans from the aforementioned British banks are at stake:
Under the terms of the deal, banks including HSBC Holding PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC, could recover 60 cents for every U.S. dollar loaned to the troubled conglomerate after seven years, the persons, who declined to be identified because of confidentiality agreements, said. Dubai World roiled international markets in November when it unexpectedly announced that it would seek a six-month standstill on its debts. The company met in December with 90 creditors in Dubai but little detail on restructuring has emerged until now.
The lack of agreement between Dubai World and banks over $22bn (£14bn, €16bn) in debts could not go on indefinitely, said Lord Mandelson, Britain’s business secretary, imploring the Dubai government to be as open as possible in engaging with its creditors.Once more, it's Mandy in the Middle of everything. Whatever happened to what's-his-name Gordon Brown? They say that when the going gets tough, the tough get going. So who you gonna call? When it comes to butting heads with perfidious Yanks or safeguarding British lending to wayward real-estate moguls of the desert lands, I guess there's only one man left to brave it all.
“Dubai has to be conscious of the fact that how it resolves its problems will mean a good deal for its reputation and how it secures investment from overseas...” he told UK business leaders in Dubai. “It has to tread carefully, openly, not too slowly – it has to reach an agreement with creditors that is fair.”
Lord Mandelson has visited the United Arab Emirates three times in 18 months as the UK government lobbies for British banks and trade contractors owed billions of dollars by overleveraged Dubai-related institutions affected by the city’s property crash and ensuing recession. Nick Anstee, lord mayor of London, held talks last week with the government and bank creditors, warning of an unsavoury investment climate if talks failed...