Could it be meltdown for York choc jobs?

And it is understood temporary agency workers - possibly hundreds - are set to be sent home as the company seeks to move permanent staff into their positions.

Worried staff at the York factory claimed 30 weeks' worth of unsold KitKats have built up in warehouses, resulting in a temporary decision to stop making the bars in several parts of the plant.

Production of Aeros is also set to halt for a month in June, said one worker.

Today union bosses confirmed agency workers looked set for the chop but could not confirm how many, and they confirmed they were aware some production lines would be halted.

Nestl today declined to confirm or deny the claims, saying only: "We have no comment to make on the comments that have been made about York factory."

And new managing director Paul Grimwood has so far declined repeated requests by the Evening Press for an interview.

One worker has claimed manufacturing on the KitKat 3 line will be limited to just nine weeks this year, while KitKat 4 and KitKat 5 will both stop for a fortnight in March.

He claimed: "Stocks are sky-high at the moment. We have made them but they are not selling them. It's the beginning of the end - everybody is convinced."

Another employee said: "We have been told by our managers that it is because of overproduction. It could be just temporary, but I have never known this happen before. I have worked there for more than 16 years."

A third member of staff said managers had informed employees that the Aero line on the factory's fifth floor, which made Chunky Aeros and the Caramel and Truffle varieties, would be stopping for a month in June, and other products such as Yorkie could be similarly affected.

The worker said temporary workers, employed on an agency basis by PMP Recruitment, were to be "off-site" by March 1.

He said: "We are being told they overforecasted sales last year. People are expecting a wave of redundancies."

One worker said more than 200 agency workers could lose work at the site.

John Kirk, leader of the GMB union which represents many Nestl employees, said the company wanted its permanent staff to become more flexible in meeting the demands of the market.

He said this would help to cut costs through the loss of temporary agency workers, and provide more long-term job security for permanent employees.

Shop stewards across the site were in discussions with management about how such changes could be made.

He said: "We have been in discussions for some time about giving people additional skills for that reason."

He said there was a decline in chocolate manufacturing generally because of health concerns.

He said this would not be the first time production lines had been halted at Nestle in response to overproduction. Asked if it had ever happened on this scale before, he said: "You will have to ask the company about that."

A spokesman for PMP Recruitment today refused to say how many of its workers were at Nestle, and said it was only aware of usual seasonal variations in staffing levels.

Political leaders keep a watching brief on plant developments

City of York Council leader Steve Galloway said they were monitoring the situation at Nestle Rowntree "very closely".

"We've got to accept that the manufacture of chocolate will have its peaks and troughs," he said.

"Residents should rest assured that we're working very closely with senior management.

"We always try to ensure that we're given as much notice of any changes as possible which is what

happened with the Terry's factory."

Len Cruddas, chief executive of York and North Yorkshire Chamber of Commerce, said: "It's the harsh reality of the global manufacturing situation - that is the business world.

"I hope to meet Paul Grimwood soon and welcome him to his new role."

After being told by the Evening Press today of the latest developments at Nestle, York MP Hugh Bayley said he would be contacting the company to ask for a briefing.

He added: "Uncertainty is bad for morale and I hope that the company makes a clear statement about its long-term commitment to manufacturing in York.

"The union has always worked with the company to increase productivity; that is one of the key reasons why Nestle remains York's biggest manufacturing employer. It makes sense for workers to be flexible, because it makes the company competitive and safeguards jobs."

Meanwhile, John Kirk, leader of the GMB union which represents many Nestl employees, said he was aware some production lines were closing temporarily, but not which ones. He said such matters were being discussed by the company with shop stewards, and he only became directly involved if redundancies were being proposed, which was not the case if agency staff left.

"It (production line closures) is something that happens in all areas of manufacturing," he said. "If workers have fears, they should speak to their shop stewards who can get in contact with me."

Turbulent times for Nestl factory staff

MATTHEW WOODCOCK takes a look back at a turbulent few months in the life of York chocolate makers, Nestl Rowntree

November 8, 2005: Workers left shocked by the sudden departure of managing director Chris White. The tough-talking New Zealander, who took over two years ago left the company "by mutual agreement".

November 25, 2005: Multi-million pound new versions of KitKat are found by the Evening Press to have been quietly abandoned by Nestl Rowntree. The York confectioner made its biggest investment in machinery in Britain when it spent £10 million on high-tech patented equipment to launch KitKat Kubes in 2003. Having produced 320 million of the bite-sized chocolates to meet anticipated demand, it spent another £10 million promoting them on TV and in shops. Millions more were spent on developing KitKat Low Carb. The two product launches were also seen by many as the company making a major commitment to the future of the York factory. But inquiries revealed both versions disappeared from shop shelves.

November 28, 2005: Nestl Rowntree bosses warned that jobs could move abroad if UK pension costs rise too high. But it flatly denied reports that it is threatening to shift production of KitKats and Smarties to the Czech Republic, putting 1,600 York jobs at stake.

December 1, 2005: Paul Grimwood replaces Chris White as managing director. The 42-year-old, whose family originally comes from the York area, has left his post as assistant to the head of Nestl Zone Europe in Switzerland to come to the city. Mr Grimwood was instrumental in delivering consistently strong business performance when he was boss of Nestl's Petcare business in the UK. He repeatedly declined an interview with the Evening Press.

January 23, 2006: It is revealed that major Nestl chocolate brands have sold so badly production lines are being stopped and hundreds of temporary workers sent home.

The changing face of the market

LESS than a year ago, Nestl Rowntree claimed sales of its York chocolates were buoyant.

Alastair Sykes, chairman and chief executive officer of Nestl UK, said last March market share had improved progressively from 16.3 per cent in the first quarter of 2004 to 17.5 per cent in the fourth quarter, driven by six per cent growth in sales of KitKat.

He said it was a realistic prospect for Nestl Rowntree to overtake the market leaders Cadbury.

But in November, Mr Sykes revealed that in an extremely competitive UK market, Nestl needed to do better. "Nestl Rowntree now needs to deliver sustainable business improvement, based on the performance of its core brands."

Pressures facing historic industry

Mike Laycock examines the state of York's confectionery industry

Along with trains and tourism, chocolate has long been one of York's most important traditions. All three once employed huge chunks of the city's population.

The 1990s was a devastating decade for the trainmaking industry, with the closure of the Holgate Road carriageworks leading to the loss of the remaining 750 jobs. But some confectionery workers fear the first decade of the 21st century will end up being equally traumatic for their industry.

The city has already seen the loss of one of its two chocolate factories, with the decision in 2004 of American parent company Kraft to close down Terry's in Bishopthorpe Road and transfer production abroad.

Manufacturing of All Gold has gone to a high-tech factory in Sweden, while the company's other major brand went to Eastern Europe where cheap labour was available.

Thousands of readers backed an Evening Press campaign to Save Terry's, mounted in conjunction with the GMB union, but the company went ahead with the closure last year. That meant the loss of more than 300 jobs, at a complex where more than 1,000 people once worked.

The closure prompted more anxiety amongst some Nestl workers about the short and long term future of their factory, which employs about ten times as many people as Terry's did when it closed.

Last autumn, the Evening Press picked up repeated rumours and speculation amongst employees about the possibility of job losses and even eventual closure and transfer of production abroad.

In November, the company finally sought to dismiss the speculation.

Updated: 14:27 Tuesday, January 24, 2006