On 24 April 2007, Amcor Limited CEO Ken McKenzie announced a substantial repositioning of the Amcor Flexibles business in Europe.
The realignment, designed to strengthen the Flexibles business in Europe, would result in an estimated 900 job losses, some site closures or plant divestment.
Prior to the announcement a communications strategy was prepared that identified the required communication tasks, internal and external audiences and associated actions that needed to be undertaken, as well as the proposed project management process.
A dedicated steering team and project team was established to oversee and implement the plan.
The objectives of the announcement were achieved – media interest was minimal, customers reacted positively and employee and union reaction was low key.
Amcor is a top three global packaging company. Headquartered in Melbourne, Australia, Amcor has 217 manufacturing sites in 34 countries. It employs 24,000 people and generates more than AU $11.0 billion in annual sales.
On 24 April 2007, Amcor CEO Ken McKenzie announced a substantial repositioning of the Amcor Flexibles business in Europe.
The announcement stated that the primary objective was to create an organisation with a smaller number of stronger businesses focused on customers and markets.
As a result, employee numbers, excluding divested sites, would be reduced by about 900 out of a total workforce of 7600 people, the final outcome to be determined following extensive consultation with stakeholders.
The current Amcor Flexibles manufacturing footprint in Europe is 38 plants in 15 countries with seven plants in Southern Europe and one plant in Poland and one Russia.
Following the repositioning, there would be a smaller number of more focused sites with improved operating performance. At the time of the announcement, plants to be sold / closed down with key infrastructure relocated were still to be identified.
Given the tenor of the announcement, it was understandably crucial for Amcor Flexibles stakeholders to receive accurate and timely information that was sensitive to their situation.
The steering committee, established to plan and oversee the initial announcement and supporting communications strategy, focussed its research efforts on identifying and understanding key risk areas to ensure appropriate resources were available to manage the risks.
These were identified as employee morale in certain plants, specific customer issues, union responses and local government pressure.
This risk matrix was regularly checked and updated following regular telephone conference calls with key Amcor Flexibles management and daily emails (circulated to all project team members).
For the purposes of the communication strategy, target publics were categorised as follows:
- Analysts / Australian Stock Exchange
- Customers / Suppliers
- Works Councils / Unions
The overall aim was to execute a well-planned communication strategy to support the announcement.
This would be achieved by communicating directly with key stakeholder groups, identified under Target Publics. The communications strategy identified the main audiences and the communication mechanisms that were to be employed to reach all stakeholders (outlined in greater detail under Implementation).
With this in mind, all site managers and appointed spokespeople were to be provided with the necessary materials to ensure consistent messages were delivered in a timely manner.
A dedicated steering committee was also to be established to oversee the project while a project team would implement the plan as outlined.
The steering committee and project team, comprising members based in Australia and Europe, were to interact regularly via phone hook-ups and email.
Given the time difference between Europe and Australia, daily email updates were identified as the most appropriate mechanism through which developments could be followed up, communication tactics outlined, documents updated and information provided on general issues.
Daily updates provided at the end of the business day in Europe to Corporate Affairs in Australia would be used as a forum for feedback.
Information from these sessions / emails, as well as feedback from stakeholders, was to be centralised in a dedicated database, which was determined as the most appropriate way to monitor the issues as they evolved.
A thorough project management process was implemented to allow for effective coordination between Amcor's head office and Europe.
A detailed time line with all internal and external actions to be implemented on announcement day (Australian and European timings) was prepared to provide the steering committee and project teams with a comprehensive overview of roles and responsibilities and a check-list for successful execution.
A comprehensive set of communication documents was prepared for each specific target audience to ensure that key messages would be thoroughly understood (examples in Appendix A).
In addition, conference calls were arranged with financial analysts to brief them on the announcement.
Key customers and suppliers were also contacted directly by the company. Feedback was compiled and assessed and messages moving forward adjusted. (See Appendix A for feedback examples.)
Q&A documents were prepared, and in the case of customers and suppliers, sales people were provided with overarching messages for delivery (see Appendix A).
Employees, work councils and unions received information directly from management. Message delivery was supported by detailed Q&A documents specifically prepared with this issue in mind and to support other relevant collateral.
The media was provided with access to local sites as required, Q & A documents were prepared for Amcor management and intensive media training was undertaken.
Briefing notes, instructions and Q & A documents (as outlined above) were delivered to the message deliverers the day prior to the announcement.
Feedback from stakeholders was centralised in a dedicated database, identified as an effective way to follow up specific questions and provide additional feedback in the days and weeks following the announcement.
Regular telephone conference calls involving Amcor Corporate Affairs in Australia and Amcor Flexibles Management commenced on 16 April.
Frequent email updates outlining progress were circulated to all project team members from 17 April.
Given the time difference between Europe and Australia, daily email updates were used to follow up project developments, communications tactics, document updates and general issues.
Daily updates provided at the end of the business day in Europe to Corporate Affairs in Australia were used as a forum for feedback.
Given the European focus of activity, information prepared needed translation into various languages. This was undertaken as required.
European and Australian media monitoring was undertaken. Clippings and analysis were circulated to the steering and project teams daily.
The following timetable was developed and implemented (detailed timeline for Monday 23 April and Tuesday 24 April included in Appendix A):
- Planned Announcement date - Tuesday 24 April
- Key Financials and draft media release finalised Monday 16 April
- Over arching messages agreed to and specific audience messages developed - Tuesday 17 April
- Flow messages into agreed ‘products’ over period from Wednesday 18 April to Thursday 19 April
- Production of any materials required - Friday 20 April
- Distribution of materials and briefing of primary communicators - Monday 23 April
- Announcement - Tuesday 24 April
The following communication tools / mechanisms were identified for each of the stakeholder groups:
- Financial Analysts / ASX
- ASX Media Release
- Conference calls
- Q&A document
- Customers / Suppliers (customer briefing note included in Appendix A)
- Schedule of calls to specific customers with tailored messages
- Q&A document and steps taken to ensure all sales people received overarching messages document (essentially a summary of the key points from the media release)
- Co-workers (Employees)
- Message from Flexibles Management in the form of a five minute webcast and a letter placed on all the plant notice boards
- Site manager information kit (copy of media release, Q&A document, overarching messages, timing of events)
- Q&A document
- Hotline for site managers to call in and ask questions
- Works Councils / Unions
- Q&A document
- Pre-announcement briefings
- Announcement day briefings sessions
- Media (see media release in Appendix A)
- Program developed for sites for local media (if required)
- Q&A document
- Engaged and trained media spokespeople (identified one key person who would handle all enquiries)
- Briefing sessions for local managers to ensure they understood what they were able to communicate if they talked to the local media through pre-existing relationships
- Nothing specific identified as government involvement was likely to be minimal – contingency planning undertaken and appropriate messages prepared
The announcement received initial media coverage in Australia, Europe and Asia. Generally speaking, media coverage was factual and neutral, although the announcement did generate some adverse coverage, particularly in the Murdoch press in Australia.
Importantly, the main business newspapers printed the announcement and published it online.
Amcor key messages were well represented in the media coverage with ‘on message’ statements attributed to CEO and MD Ken Mackenzie.
By day two, there was no European media coverage.
The story continued to be published in the Australian media, evenly split between neutral and negative. Language used included “…substantial repositioning…” and “…revamp its European operations…” to “…aggressive cost cutting…” and “…wielding cuts…”.
Quotes from analysts, an important stakeholder for the company, were as follows:
- “It reflects Amcor's broader strategy from the past couple of years to cut capacity, lower costs and gain the benefits of scale" by shifting production…”
- "It makes a lot of sense to move these operations into Eastern Europe because you don't have the some restrictions from unions and governments.”
- “The strategy is good going forward but it will take time to gain traction, and it will certainly take time to see significant growth return to Amcor,”
- “The stock's poor performance is increasing its attractiveness as a buyout target,”
- “Amcor is continuing the process of renewal but it's clearly not a sprint. It's turning into a marathon.”
While employees were advised of the restructure as soon as practical, no detailed information was available regarding who would be specifically affected.
Management reported that there was some local anxiety regarding the announcement, but this was expected and was managed accordingly.
Management feedback indicated that employee / union response was “quiet” and employee sentiment “serene”.
Key customers reacted in a positive way to the repositioning message.
Comments attributed to customers indicated they felt “…it was the smart thing to do for Amcor.”,
Customers also indicated that they appreciated the proactivity of the communication effort.
The project management process developed and implemented specifically for this task worked extremely successfully despite the time differences between Melbourne and Brussels.
Daily telecommunications at the end of the European business day and regular email communications were seen as extremely effective to allow for follow up on project developments, communicate tactics, update documents and discuss and agree on general items moving forward.
The Australian and European-based teams were quickly integrated into the steering and project committees with a clear understanding of the scope of the ‘issue’ thanks to comprehensive situation briefings supported by a truly transparent process.
The announcement was generally received well - reaction by external (media and financial analysts) and internal stakeholders revealed a general acceptance of the need for change.
It is important to note that the communication strategy development to meet the objectives of the initial announcement about the company’s respositioning in Europe, has laid a solid foundation for the next phase of communication activity that will be required when Amcor fully implements its restructuring plan.
Importantly, the detailed time line with all internal and external actions to be taken on announcement day (Australian and Central Europe timings) provided a clear overview of roles and responsibilities and a check-list for appropriate and thorough execution.