May 17, 2020

Campbell Soup cuts jobs, eyes supply chain improvement

Supply Chain
Supply Chain Management
Supply Chain Manageme
Supply Chain
Freddie Pierce
2 min
Cutting 700 jobs is a risk, but Campbell Soup’s supply chain management initiatives should pay dividends
Those of you who think that adding jobs in the U.S. will stimulate the economy best look away now. Campbell Soup is starting up a new supply chain mana...

Those of you who think that adding jobs in the U.S. will stimulate the economy best look away now.

Campbell Soup is starting up a new supply chain management initiative aimed at recovery and economic stimulation, but will be cutting 700 jobs around the world as part of the supply chain overhaul.

At a biscuit plant in Australia, a new automated supply chain management system will cost $40 million over the next year-and-a-half to integrate and will come at the expense of 190 jobs.

Other job cuts will come at Campbell Soup’s Camden, New Jersey headquarters and in Michigan. The company will also be leaving the Russian market after just four years of action there.

Despite the cuts, Campbell Soup views the change as a positive move for the company.

“The supply chain initiatives will enable us to improve manufacturing efficiency and further adjust the utilization of our assets to evolving consumer demand,” Denise Morrison, Campbell’s current COO and incoming CEO, said. “While a workforce reduction is always a very difficult decision, these actions will streamline our organization and improve the level of coverage and the effectiveness of our sales merchandising activities."

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Overall, Campbell Soup’s supply chain overhaul will cost roughly $75 million but is expected to produce savings of $60 million in fiscal years 2012 and 2013, with an expected savings of $70 million in 2014.

Cutting jobs will always bring about some form of public backlash, especially at a time of economic instability, but Campbell Soup’s supply chain management plan is a smart one.

By moving to automated systems and outsourcing merchandising operations, the company increased its supply chain flexibility while lowering cost. Losing close to five percent of its workforce with the cuts could be dangerous, but Campbell Soup is taking a calculated risk to enhancing its supply chain.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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