Mondavi loses one third of workforce, sacks Michael

mondavi News Wine News
  • Tuesday 5 October 2004

The fallout at the Robert Mondavi Corporation continued this week as 360 employees were made redundant – and Michael Mondavi was forced out by the board.

Mondavi, who co-founded the company with his father Robert in 1966, was chief executive until 2001 and chairman until January this year.

His seat on the board was his last post. Late last week the governing committee of the board wrote to him requesting his resignation ‘as a result of quotations he made to the press’ a Mondavi spokeswoman said.

Mondavi had expressed doubt to the Los Angeles Times, among other publications, as to whether the US$400m-valued luxury brand portfolio would actually sell. ‘Just because you ask a lot of money for something doesn’t mean you’ll get it,’ he was quoted as saying.

In the middle of September the Corporation electrified the wine world by announcing it was selling off its premium brands, its vineyards and its Oakville headquarters in order to concentrate on its high-volume brands like Woodbridge, La Famiglia and the Robert Mondavi Private Selection.

Michael Mondavi never kept secret his opposition to the break up of the company, and said as much in his resignation letter to chairman Ted Hall.

Meanwhile in a bid to make the company a going concern, 360 staff – a third of the workforce in the company’s homeland of Oakville – has been laid off.

Eighty-three of these are full time staff, and 14 seasonal; the rest are 134 vineyard employees, of which 95 are full time.

The reason for the move is ‘as an appropriate configuration for a successful future for the business whether we are managing it or not,’ the spokeswoman told decanter.com.

The layoffs will not take effect for some months, allowing the harvest to go ahead smoothly.

In a public announcement to all staff, winegrower and vice chairman Tim Mondavi, Michael’s brother, said he was very pleased with the way the harvest was going.

Whether Tim’s future with the company is certain or not is a moot point. ‘You never know what is going to happen. We can’t promise anything,’ one company insider told decanter.com.

The future of the Mondavi jewels - the elegant Mission-style Oakville winery, a Napa landmark for four decades, the ultra-sophisticated Opus One winery, the ancient To Kalon vineyards and the glittering portfolio of luxury brands – is as uncertain.

The joint venture partners – the Frescobaldi family who own half of Ornellaia after Mondavi acquired a controlling share in the brand from Antinori in 2002, and who developed luxury brand Luce with Mondavi in 1998, the Rothschilds who still own half of Opus One – have first refusal on any sale.

On 28 October Mondavi will make its first quarter earnings conference call during which details of how the assets break down will be made public. Details will also be given on how the various assets will be bundled for sale.

Throughout the entire episode, chairman emeritus Robert Mondavi, acknowledged as one of the founding fathers of Napa wine, has remained silent.

‘He continues to serve as an ambassador for the company,’ the spokeswoman said. ‘He’s in Canada at the moment, at a wine festival.’

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