U.K. unions and lawmakers criticize Kraft CEO

LONDON -- A Kraft Inc. executive apologized on Tuesday for raising -- and then dashing -- hopes that it would keep open a British factory after its takeover of Cadbury, as the U.S. company's chief executive came under fire from lawmakers and union leaders.

Executive Vice President Marc Firestone said he was "truly sorry" for the uncertainty caused by Kraft's back track on the factory in Somerdale, western England, adding that the company did not plan to shut any more British factories or ax further jobs for the next two years.

"We are terribly sorry about that, and I am personally terribly sorry," Firestone told a cross-party committee of lawmakers who are holding a series of hearings into the takeover. Kraft's takeover of 195-year-old Cadbury caused much consternation in Britain, where it is a much-loved brand and the company's future remains in the spotlight ahead of a general election to be held by the start of June.

Members of the House of Commons Business Select Committee lashed out at CEO Irene Rosenfeld for failing to appear before the inquiry at Britain's Parliament on Tuesday, while the Unite union criticized her for failing to meet directly with workers at Cadbury sites across the country to reassure them about the company's plans.

Brian Binley, a member of the opposition Conservative Party, said her absence was a "sizable discourtesy," leaving Firestone to face a barrage of largely hostile questioning.

Firestone said Rosenfeld had the "deepest respect" for the committee and was absent to attend a board director's meeting, but the committee chairman, Peter Luff, pointed out the session had been arranged "around your convenience, not ours."

During a long and bitter takeover battle, Kraft said it would save the Somerdale plant and 400 associated jobs, a decision that would have reversed earlier plans by Cadbury to close the factory and move production to Poland.

However, shortly after Kraft completed its 11.5 billion pound ($17.5 billion) takeover last month, it said the plant would close by 2011 because it had become clear that it was "unrealistic to reverse the closure program."

An official complaint has been lodged with the U.K. Takeover Panel, alleging that Kraft misled shareholders and workers.

Firestone said that Kraft had made the announcements in good faith, but without understanding the extent of Cadbury's 100 million pound investment in the new facilities in Poland and that most production would be transferred by the middle of this year.

Lindsay Hoyle, a member of the ruling Labour Party, questioned whether the U-turn on the Somerdale site suggested Kraft was "remote, smug and worst of all duplicitous," while other lawmakers expressed amazement that the U.S. company was not fully aware of Cadbury's plans.

"We want to regain the trust of our colleagues, government and public," Firestone told legislators. "We want to develop a stronger growth platform in the U.K. and globally. We understand that in acquiring a British icon we have a responsibility to preserve its heritage."

Jack Dromey, deputy general secretary of the Unite union, who also gave evidence to the committee, said Rosenfeld should create goodwill by meeting with workers in person.

"We don't want to go on seeing Irene on YouTube, we want her to sit down with workers," he said. "Warm words and cheesy smiles are not enough."

Trevor Bond, the former head of Cadbury in Britain who is now head of Kraft in Europe, said the company had no plans to rename any of Cadbury's brands managed out of Britain and would continue to produce the much-loved Dairy Milk brand in Britain.

Bond added that Kraft would continue to sponsor the 2012 Olympic Games under the Cadbury brand.