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But the confectionery giant says it will invest up to $51 million in Dunedin during the next two and a half years.
Amid mounting speculation around the city today, with management and staff meetings being called, Cadbury announced at 3.30pm a $A135 million ($NZ166 million) investment package for the Dunedin site and two in Australia.
There will be $51 million being invested in Dunedin, at a cost of 145 jobs, $61 million at Claremont in Tasmania at a cost of 160 jobs and $22 million at Ringwood in Victoria at a cost of 25 jobs.
Cadbury's spokesman Daniel Ellis said from Melbourne yesterday that the proposal to make the New Zealand staff redundant would move into a three to four week consultation stage and a final decision was likely by mid to late-September.
In November 2006, Cadbury announced a $20 million investment in its Dunedin plant, to deliver a 200% increase in production of its chocolate crumb ingredient.
The Government contributed $2 million of the $20 million for a separate crumb research and development centre at the Dunedin plant.
Potential for change was first signalled in March 2007 when a second worldwide restructuring plan for Cadbury Schweppes, the worlds largest confectionery group, was announced, with the intention to cut 15% of its 50,000-strong global workforce over four years, but no changes for Dunedin were aired at the time.
Service and Food Workers Union southern region secretary Campbell Duignan said while staff were aware of such proposals, today's announcement was a shock.
"We had been led to believe there would essentially be a product line by product line assessment process made," he told NZPA.
"So we envisaged it would be a process that happened over time, but what they have clearly done is gone away and had a look at the whole operation and made some decisions about simply specialising production out of particular factories.
"Essentially, that's what they have announced today with the associated job loss on the one hand and capital investment on the other."
He said while staff were stunned, there appeared to be some acceptance, and it was positive that money was being invested in the plant.
"We're just upset that it's at the cost of so many jobs."
Mr Duignan said there was also cold comfort that the lay-offs would not be enacted for a few more months.
"In pretty poor circumstances it could certainly be worse," Mr Duignan said.
He said the union would now liaise with counterparts in Australia and work to try to minimise losses and the impact of losses.
Cadbury Schweppes managing director for confectionary in Australia and New Zealand, Mark Callaghan, said the changes were needed now in order to be able to remain competitive.
"When implemented, these changes would reduce complexity, remove duplication and improve
Mr Callaghan said the company realised the difficulties placed on the affected staff and would provide career planning and support services. - with NZPA