Continental Tyres
The next item of business is the ministerial statement from Mr Henry McLeish on the proposed closure of the Continental Tyres factory at Newbridge. There will be questions at the end of the statement, so there should be no interventions during it. Members should note that we will move on to the next item of business at 3:10, so we have about 25 minutes for this particular item, should we need it.
I am glad that I was spared the technological exercise that Tom had. I was a bit apprehensive about touching the movable podium that has now arrived in front of me.
With your permission, Sir David, I would like to make a statement on Continental Tyres. On 18 August, Continental Tyres announced the closure of its Newbridge plant with the loss of 774 jobs. I do not have to tell anyone in the chamber of the devastating impact that that news had on the individual workers involved, especially after their efforts over the past couple of years to ensure the viability of the plant. Local managers and the work force had implemented a new shift pattern, and had also increased their working week from 39 hours to 42 hours without any financial recompense.
Despite all that, the company decided to announce the closure—a commercial decision that was based on a number of factors. The Newbridge plant had been losing money over a number of years. Continental's share of the market for the tyres that are produced at Newbridge has fallen significantly and shows no signs of recovery. The company's restructuring strategy includes large, low-cost, high-value production facilities in eastern Europe, Mexico and other locations worldwide. None of those reasons, of course, brings any comfort to the people that are affected by them.
The Government and its officials have been in close touch with the company—here and in Germany—for a number of years, offering advice and assistance. The Newbridge plant is not in an assisted area; nevertheless, when the plant brought in a new shift to improve production levels, and therefore viability, Lothian and Edinburgh Enterprise Ltd was able to offer assistance with the training of new workers who were recruited to meet the demands of the new shift patterns.
Officials from the Scottish Office, Locate in Scotland and LEEL were able to offer advice
about how the company could maximise the amount of training assistance that could be offered. The company was also aware of the support that the Government could make available for restructuring or relocation. However, it is not the job of Government to tell companies how to run their business. If, like Continental, they feel that they do not want to invest further, unfortunately we cannot force them to.
As members will be aware, I was in touch with the company before and after the announcement of the decision to close the plant. As soon as I knew of the company's intention, I immediately set in motion the actions that were needed to ensure that the Continental work force would have the advice and assistance that they would need to ensure that they would find suitable alternative employment. We set up an action team, including representatives from the Continental work force, local and regional trade unions, LEEL officials and local MSP Margaret Smith. I am pleased to say that that team—chaired by my colleague Nicol Stephen, who is the Deputy Minister for Enterprise and Lifelong Learning—had its first meeting at the company premises within two days of the closure announcement.
The action team has since met again and has put in place a number of initiatives to assist the work force. Those initiatives include providing a work force profile and skills analysis, and providing an on-site opportunities shop offering help and advice on, for example, training, Jobsearch, welfare and benefits, business start-ups, information technology training, finance and investment, debt counselling and interview skills.
It is our hope that this team will be as effective as the team that supported Mitsubishi employees in the wake of the closure of the Haddington plant. To date, only 18 of the 505 people who were made redundant are still seeking employment.
My colleague Nicol Stephen has been in close contact with Continental's management here in Scotland, and he travelled to Hanover on Monday for an early-morning meeting with senior Continental representatives to clarify the company's future intentions. He also emphasised the importance that we place both on the settlement package for the work force and on full co-operation with the action team in terms of retraining for new employment.
At the meeting, we urged the company to provide the employees with the most generous redundancy package possible. In addition, senior management at the company responded very positively to Nicol Stephen's suggestion that they visit Scotland, in person, to meet the action team. They are currently discussing how and when to do that.
The future use of the Newbridge site was also discussed at the meeting, and Locate in Scotland will continue to pursue that with Continental. In the meantime, the company agreed to my suggestion that an economic and financial appraisal should be carried out to help establish future options for the site. This will be done as soon as possible.
All members will acknowledge the impact of Continental's decision to close its plant at Newbridge. This is a hard time for those involved and for their families, and the Scottish Executive will continue to do everything it can to help them now and in the future.
I would like to begin by associating the SNP with the minister's comments that expressed regret at the closure announcement by Continental. I extend the sympathies of the SNP to the families that are affected by the decisions that have been taken. I also give all support to the action team in their work of guaranteeing that we can assist in delivering new and alternative employment to those who have been affected by the closure announcement.
I would like to put three specific points to the minister. First, I was very surprised that he made absolutely no reference to the strength of sterling in his opening remarks about the factors that had led Continental to this decision. The survival package at Continental was based on valuation of the pound at DM2.80. The pound is now valued at more than DM3.00. What significance does the Minister for Enterprise and Lifelong Learning attach to currency, and to the damage that sterling's strength is doing to a number of key manufacturing sectors in the Scottish economy?
Secondly, was the minister aware, before the closure announcement was made, of the existence of a company minute that suggested that there had been zero response to initiatives from the company for support from the Government over a period of five years? If he was aware of that minute, does he believe that it is a fair and accurate reflection of what the Government was doing? If it is not, why did the company feel it necessary to record that?
Finally, in this statement the Government has presented a case for acting in a reactive rather than a proactive fashion, but the Government has not delivered the active company development support that could have been expected by a company that was facing challenges in the manufacturing sector. The Government has a great deal to learn about how to support the Scottish economy in the critical and difficult times that many of our companies face.
First, I am grateful for the association of the SNP with concerns about the
work force and I want to express our appreciation for the work of Harry Donaldson of the General, Municipal and Boilermakers Union in particular. They have been intimately involved in this at every step of the way.
Mr Swinney raised three specific points. I will put the reference to sterling's importance into context. In the first quarter of 1999 it was clear that manufacturing exports from Scotland were up by
8.3 per cent over the previous four quarters. The volume of exports was up in a very difficult trading situation. How much that weighed on Continental is a matter for that company. I want to respond robustly to Mr Swinney's second point. I must say—although it is not my natural style to talk about the injection of party politics into a serious issue—there was much made of the lack of activity of the Executive and the previous ministers. If the SNP had followed up on my telephone call to Fiona Hyslop, it would have found that on 30 occasions between 1993 and 1999 officials of the Scottish Office and this Executive or ministers had been in touch with the company. We were there at every conceivable point, not only in terms of training packages, which are crucial in restructuring work forces and shift patterns, but in terms of offering a different future that the company might want to examine.
At the end of the day the company must make its own decisions, but I refute utterly the criticisms—particularly those that were made by certain members of the SNP—regarding a zero response. That simply did not happen. We wish that the outcome could have been different but it was for no lack of trying that it was not. If people want to make cheap political points out of that, they can; but we have been sincerely involved with the work force and, for six years, we have tried to do what was best by the company and by Scotland.
The company minute about the Government's zero response to the situation was prepared after a video-conference between people at Newbridge and in Germany. I do not know why the note was written in that way. When I spoke to Dr Holzbach, he did not want to be associated with that interpretation of the minute and has, on numerous occasions, said that the Government has always been there to respond if required. As I said in my statement, the Government was there to help, but at times there was no response. That was the company's wish.
On behalf of the Conservative group within the Parliament, I want to express our deep sorrow to the work force and to share the sentiments that have been articulated. We hope that the workers will find a secure future through the assistance of the action team and that they know that the
Parliament supports them by trying to secure some way forward for them.
I would be grateful for the minister's comments on two areas that are a cause of concern. We, and the work force, will want to be reassured that the action team is not a seven-day wonder. Can the minister confirm that he intends to report to the chamber on the action team's progress? We all have a profound interest in what is happening at Newbridge and would like to kept informed of what progress has been made.
Secondly, I accept in good faith what the minister has said in his statement about the company and other interested parties having a collective will to introduce counselling and retraining programmes. However, it is vital that such a help package is conducted on a one-to-one basis with the employees. I would welcome the minister's clarification of those aspects.
I thank Annabel Goldie for her comments on behalf of the Conservative party. The House should be united in helping the work force to move on.
I can reassure Miss Goldie that the action team is not a seven-day wonder. We are embarking upon a serious programme that involves many agencies and it is important for that to succeed. I also repeat the reassurance that I gave to Mr John Swinney's Enterprise and Lifelong Learning Committee this morning that we will work closely with the committee and with every MSP and that we are happy to put on record what the action team is doing. It is important for MSPs to have confidence in what is happening and for the work force to know that this chamber respects and appreciates them.
Annabel Goldie is right to stress that we should not approach counselling and retraining programmes in a mass or volume way, but on the basis that every individual in the plant has skills to offer and a future to be secured. I can also reassure her that everything will be done on a one-to-one basis. I have no doubt that, with the expertise and skills of the work force, such an approach will be a significant help during what will be a difficult time for the work force and their families.
As a local MSP, I want to record my sincere disappointment at Continental's announcement of these job losses. As well as the 774 jobs to be lost at the plant, the loss of other associated jobs will take the total to more than 1,000, which is obviously catastrophic not only for my constituency, but for neighbouring MSPs' constituencies and for the areas represented by list MSPs.
I am involved on the action team and have
listened to Annabel Goldie's comments. The Enterprise and Lifelong Learning Committee and the Parliament must be kept in touch with what the action team is doing. I expect to have a mid- to long-term active involvement in the action team to secure a better future for the people at Continental. We share the concerns that have been raised about the work force, who have worked incredibly hard to keep their jobs. We owe it to those workers to do everything that we can to secure new jobs for them through retraining and access to education. I certainly intend to do that.
The minister outlined some of the action team's positive work, but one of the things casting a cloud over that is that the company appears to be offering the work force worse redundancy terms than it has in the past. For example, when the company pulled out of Ireland in 1996, it offered the work force five weeks for every year of service. At the moment, my understanding is that Scottish workers are being offered three weeks for every year. What is the Executive doing to make the point that we believe that the work force at Newbridge should be given the best possible package? What powers do the Executive have to bring pressure to bear on Continental to make that a reality?
I thank Mrs Margaret Smith, the local MSP, for her involvement and assistance. We have spoken a number of times and I know that Nicol Stephen has also been in touch. I think that the work force is grateful for her extensive interest in this major issue, which arose just after she was elected on May 6.
It was no coincidence that when Nicol Stephen went to Germany the first and most important item was the redundancy package. It is not within the power of the Executive or this Parliament to deliver on redundancy packages. Different countries, for example, Germany and Ireland, have different labour laws. We are keen to reinforce the confidence of the work force and that is why Nicol Stephen and I met Harry Donaldson about an hour ago. We would not have put redundancy payments high on our agenda and we would not have mentioned them today if we did not sincerely believe that the work force at Newbridge deserve the very best. Many people there have given a great deal of their life to production at Newbridge and we still stand foursquare behind the objective highlighted by Mrs Margaret Smith.
Reinforcing the point made by Annabel Goldie, I will also say that this action team must work. We must be optimistic and confident. If Margaret, or anyone on the action team, feels that there is something else that we can do I would like to hear about it because, certainly, we will want to respond.
Speaking as the member for one of the constituencies that neighbours Margaret Smith's constituency, I thank her for keeping me and other colleagues fully informed. The way that Margaret has operated is an example to other members, and I hope that others will adopt that practice in future. I want to record my concern for the staff and families, many of whom live in my constituency.
What discussions has the minister or the Scottish Executive had with the unions that are representing the staff at Continental? What requests have the trade unions made of the Scottish Executive and how has it responded to those requests?
We have tried to keep our discussions as tidy as we can and that is why we have been concentrating on discussions with Harry Donaldson. I think that between us, on a dozen occasions, we met and discussed the situation in the plant and discussed what was happening in relation to the whole work force, both staff and employees.
Briefly, in response, I will make two points. The redundancy package is crucial to the short-term well-being of many of the workers and families. There are also important skills in the plant which cover all elements of the work force and which I hope can be used to secure employment. We are working with everyone concerned. I am grateful for the contributions that have been made because it is a partnership approach now. That is one of the benefits of this exercise, and I hope that it can win success.
The minister ended his comments by saying that it is a partnership approach now. I will give a different perspective of this closure. The chamber should be united in grief at not only the loss of this manufacturing concern and the tragedy that it represents for the workers and their families—
You must ask a question, Mr Sheridan.
Will the minister consider the point that this is not a natural disaster, but a man- made disaster or, more appropriately, a multinational-made disaster? Does the minister agree that there is clear evidence that Continental ran down the Newbridge operation over the past three years and that members of the work force— despite their being prepared to jump through hoops in terms of partnership and flexibility—have been severely let down by Continental? This is not about loss of market; it is about cheap labour being available in other parts of Europe. Obviously, the Continental plan is to close down in Newbridge and open up in Romania in order to exploit cheap labour.
Does the minister also agree that it is essential that the fullest provisions of the Scotland Act 1998 are brought to bear in terms of the redundancy question? Margaret Smith made the point about the offer that was made to the Irish workers in 1997. I remind the minister that that offer—
Mr Sheridan, you must ask a question.
The offer that was made to the Irish workers in 1997 was for four—not five— weeks' redundancy pay for every year of employment. Only after the Irish Government intervened by going to the employment tribunal did Continental increase its offer. Will the minister assure me that the fullest provisions of the Scotland Act 1998, up to and including the removal of assets and machinery from Continental, will be enforced by the Parliament if the company is not prepared to offer a reasonable deal to the Scottish workers? Given the workers' performance and loyalty over a great number of years, that is what they deserve.
What is important is the working relationship that exists between the various members of the action team, the Executive, local MSPs and the trade unions. I take it that the Parliament respects the views of the trade unions and of the full-time trade union officials on what we need to do to progress the matter. It will not be helpful if the chamber decides to raise expectations on any particular front; that is not the way in which we should approach a very serious situation.
We have already given an assurance that we want the best package to evolve from the current discussions. We are committed to that, the Parliament is committed to that and we will see what can be achieved. We also want to progress the constructive developments within the plant so that people who have the skills can move on to work. That is the best strategy and the one that we should support.
I appreciate the recognition that the chamber gives to the work force. As a Lothians list MSP, I know many members of the work force and they will appreciate that support. I also appreciated the briefing that Henry McLeish gave me before the closure announcement and, at that point, I warned him in a private phone call about the zero response minute.
I do not know about the 30 communications that he mentioned. I asked a number of questions to elicit exactly what communications had taken place and what support had been offered by the Executive and by the previous Government. In the answers that will be published in the next few days, there is no mention of 30 communications.
Why has the minister not given me information about those communications?
Secondly, let us look to the future. I acknowledge that there is a limit to what the Executive can do, that the plant does not have assisted area status, that the bulk of the work force live in West Lothian and that most of the rest of West Lothian is being stripped of assisted area status—
Ms Hyslop, you must ask a question.
What actions has the minister taken, or will he take, to ensure that the Kirkliston area achieves assisted area status in the new proposals?
On the first question, we talked about the issue prior to the closure. I have a serious message for every member, including myself, who might be involved in redundancies: we have an open-door policy; we can be telephoned and we can meet and discuss. When that video-conference was mentioned in the minute, it was of no significance because it was totally without foundation. I say to Fiona, in the most constructive way possible, that that is the way in which we should conduct our business. If people want to speak to me, I will speak to them, and I will tell them as much as possible, subject to the confidentiality often involved in inward investment issues.
My wider point is that there is good news on jobs in Scotland at present. While that does not necessarily mean that people will move from Newbridge into those jobs, I want to make the point that, apart from the action team, we are working on a bewildering number of activities in Scotland, from lifelong learning to enterprise. John Swinney will testify to that from this morning's committee meeting. We have a tourism strategy, a manufacturing strategy and a science strategy, and I can reassure Fiona Hyslop that those strategies are about economic development in the wider sense. However, the key for the Executive is to focus on Newbridge and on tradeable skills, and to ensure that every person in the plant has a future—one where their families can continue with the life that they had prior to the closure announcement. Those are noble objectives to which, surely, we can all sign up.
I endorse the comments of my colleagues on the dreadful job losses at Newbridge. In my previous life, I was a major employer in the Newbridge area, employing 70 people there. I know the area and the people well. In a spirit of co-operation with Mr McLeish—
I am sorry, Mr Johnston—
Thank you, Sir David. I wish to make one or two points that could help Mr McLeish if he were to ask questions of his fellow ministers.
Will Mr McLeish ask whether the planning process could be speeded up and streamlined to make the planners less obstructive to development in the area? Will he speak to the Civil Aviation Authority, which also has a great impact on employment in the area, as there is a tendency to limit the number of people who can be employed in the corridor leading west from Edinburgh airport? Is he aware that a planning application for leisure use of the 20-acre site opposite has been submitted? How does he envisage Continental's 60-acre site fitting into the plan for the area?
I am grateful for Mr Johnston's constructive comments. I have no jurisdiction over planners anywhere, although I have to confess that, with a degree in urban planning, I am one of the people whom he may be criticising. However, suffice it to say that planning is a matter for the Minister for Communities.
On a serious point, we have asked for an economic, technical and financial appraisal of the area. It is crucial that we reach the point where we can look at a future for this strategic site. We will want to discuss that future with everyone in the area, including the CAA and the complexes that have been developed by the City of Edinburgh Council, West Lothian Council and others. This is a genuine team effort and the spirit of Mr Johnston's question suggests that we can make progress if we all work together.
I agree with other speakers that this has been a devastating blow to the work force, even if the threat has been hanging over them for some time. One of the effects of such a blow is that the morale of the work force becomes very low and people's confidence is shattered. I have seen the task force's work plan and I know that it will set about reinstilling confidence, showing people that they can go on to find alternative employment.
Does the minister agree that the work force were in no way and under no circumstances responsible for this situation? As has been said, the work force have jumped through hoops, changing shift patterns and taking wage freezes. They have been responsive to changing patterns in the marketplace; the work force have been good.
Will the minister agree that, should any employers in the local area be looking to take on these people, they will find a co-operative and skilled work force who will be a boon to their business? If the work force were taken on, that would bring back life into the area.
I am happy to endorse what Mary Mulligan says. The Executive has made the point that, over the past few years, the work force have attempted to work with senior management to restructure and to become involved in shift patterns—at a financial cost.
Confidence is crucial, and that is why a positive message today from the Parliament to the work force will ensure that we can work together to achieve the desired outcome. The work force have real skills, determination and enthusiasm, which are very marketable. We will do everything possible to ensure that employers throughout the area know the work force are dependable and skilled people who deserve a new opportunity. That is what we will work towards.
We must move on to the main item of business, but first I remind all members that ministerial statements are followed by questions, not by alternative statements. We were slipping a bit this afternoon.