Bausch & Lomb (Livingston)
The final item of business is a members' business debate on motion S3M-5401, in the name of Angela Constance, on Bausch & Lomb. The debate will be concluded without any question being put.
Motion debated,
That the Parliament regrets that Bausch & Lomb is continuing to pursue closure of its manufacturing plant in Livingston; remains deeply concerned that the phased closure and transfer of production to Ireland will result in the loss of 500 jobs in Livingston; notes that the 90-day statutory consultation period ends on 14 December 2009; regrets that Bausch & Lomb has not reconsidered its decision to close the highly successful and award-winning site in Livingston; applauds the productive, skilled and committed workforce, which has been crucial to the success and efficiency of the Livingston site; notes with sadness that the first round of redundancies will result in 45 people ceasing employment on Christmas Eve; would welcome a continuing dialogue between Bausch & Lomb and the Scottish Government with a view to both protecting jobs and supporting those who now face redundancy; notes that the phased closure of the plant will continue to afford time and opportunity to mitigate against the colossal impact on the West Lothian economy; notes that unemployment in West Lothian is at its highest in a decade, and welcomes the cross-party and community-wide support for the workforce and the determination to succeed that exists in West Lothian despite the current economic challenges.
I am proud and privileged to represent the constituency in which I was born, and I regret deeply the decision that has been taken by Bausch & Lomb to push ahead with the closure of its award-winning manufacturing site in Livingston. It is a devastating blow for the workforce and for the local economy in West Lothian.
When I was growing up in West Lothian, in the early 1980s, male unemployment in the area was one in four. Indeed, my father was one of those statistics. I therefore take seriously any job losses in my constituency.
I thank members across the political spectrum for supporting the motion that is before us tonight. Members will be aware that the first 45 of the 500 planned redundancies took place during the holiday period. Losing one's job is hard at any time of the year is hard, but it is harder still at Christmas.
While there is stoicism among the workforce, there is also immense dignity and pride. The decision to transfer production from the site in Livingston to Waterford in Ireland represents an injustice to a committed and highly productive workforce, given Bausch & Lomb's success in Livingston. Bausch & Lomb acquired the Scottish contact lens manufacturer Award in 1996, and based its operations in Livingston, which remains highly productive and efficient. The SofLens product meets the high quality standards for the Japanese market, and only 20 contact lenses in a million are lost. Livingston is a lean operation—local management certainly do not jet about in first class.
Bausch & Lomb was highly regarded, and was supportive of other local businesses and the wider West Lothian community. However, despite its reputation, success, efficiency and prudence, the Livingston site still lost out to Ireland, and we must ask ourselves why. Bausch & Lomb is owned by Warburg Pincus LLC, a New York private equity company, which, in response to the current economic downturn, crunched some numbers and decided that it needed to reduce its manufacturing sites from three to two. There is not much that we can do about that—until we scratch the surface and look a little closer.
Bausch & Lomb was never going to close its corporate headquarters in Rochdale in New York, which is the mother ship, with a large research and development base. It was therefore a choice between Livingston in Scotland and Waterford in Ireland. The significant factors in Ireland's favour include lower corporation tax and the ability to access Government grants. In contrast, West Lothian lost its assisted area status in 2006. It also costs more to make workers redundant in Ireland.
When will we truly learn the lessons of the importance of corporate HQs, investing in R and D and considering how best to compete with the world? When will we learn that, to protect Scottish jobs, we need a Parliament with the economic and taxation powers to do so?
The 90-day statutory consultation period has expired, and Bausch & Lomb, Unite and staff representatives have agreed on an enhanced redundancy package. A range of training programmes has been made available, and a job shop and advisory centre has been set up on site, supported by partnership action for continuing employment. The first phase of transfer of production will commence this month and the process will continue into 2011. However, I believe that where there is life, there is hope, and I urge the Scottish Government and Bausch & Lomb to leave no stone unturned to see whether some remnant of the business can remain in Scotland. After all, acorns grow into oak trees.
If we cannot save jobs, we have to find sustainable ways to create them. I will therefore focus on the opportunities that are afforded by the clawback of the regional selective assistance grant of £1.1 million. I am already on record as advocating that that money should be utilised to create jobs in West Lothian. Indeed, there is precedent, as that is exactly what happened when Motorola left the area.
I remind the Cabinet Secretary for Finance and Sustainable Growth that West Lothian has the highest unemployment in a generation, above both the Scottish and United Kingdom averages. Youth unemployment is in excess of 8 per cent, and we have one of the largest more choices, more chances cohorts in Scotland.
I began my speech by reflecting on the West Lothian in which I grew up, and I will end by reflecting on the determination that there is to succeed in West Lothian. There is an economic partnership between the local council, college and chamber of commerce, all of which contain people with experience, commitment and the will to drive us through these difficult times.
To me, West Lothian is like Scotland: it is small and beautiful in parts and has so much to be proud of. However, like Scotland, it could do so much better. I hope that the cabinet secretary can help us to achieve that better future and give serious consideration to the use of the RSA clawback.
I welcome Angela Constance securing this evening's debate. Like her, I recognise that the redundancies have already started, but the debate gives us an opportunity to recognise the work of the Bausch & Lomb employees, to consider the continuing support that they will need, and to consider any lessons that can be learned from the closure.
I thank the cabinet secretary for meeting me and my colleague George Foulkes to discuss the issue. Although the plant is in the Livingston constituency, it is clear, particularly from the contacts that I have had, that many of my constituents in Linlithgow are strongly affected.
I acknowledge the skills and expertise that the Bausch & Lomb employees have displayed. Indeed, it was due to their success and that of the former owner of the Award company, Ron Hamilton, that Bausch & Lomb sought to take over a sound and successful company. The closure of Bausch & Lomb is a kick in the teeth for employees who have shown nothing but dedication and professionalism in their work. Unfortunately, we know that, once the private equity firms move in, as Warburg Pincus did in 2007, all that they look at is the bottom line.
We know that most of the work will be transferred from Livingston to Waterford in Ireland. I know Waterford well and, although it has had its own problems with the closure of the crystal factory, I deeply regret that the jobs will move there. I wonder how quickly Bausch & Lomb will be able to merge the two operations in Waterford, but that is its problem. My main concern, and that of others who are here today, is to look at the present and future for the Bausch & Lomb employees at the Livingston plant.
I note from the letter that we received from Bryan Buchan, the director of operations, and from Angela Constance's comments that a job shop and advisory centre have been established on site. I welcome that and the support that has been offered by the PACE team. I know from experience—unfortunately—that West Lothian College as the local further education establishment will offer first-class support to all employees who look for training courses. However, I seek an assurance from the cabinet secretary tonight that the agencies will be flexible and as open as possible to proposals that employees may have about their future. In the past, agencies have been a little—shall we say—careful about what they consider to be real training and real job opportunities. If the recession has shown us anything, it is that there are no certainties in the job market. I therefore hope that the cabinet secretary will encourage the agencies who are involved to look at all reasonable ideas that are put forward by employees.
We all have to acknowledge that we live in a global economy and that, despite the skills and dedication of the workforce, such as we have seen at Bausch & Lomb in Livingston, jobs can be lost. However, Governments can ensure that the right environment exists for new jobs. That requires a well-educated workforce, good infrastructure and a responsive planning system, all of which lie within the powers and remit of the Scottish Parliament. Maybe the cabinet secretary could say a little about what the Scottish Government is doing and will do to face those challenges.
I hope that 2010 will be a better year for the employees of Bausch & Lomb in Livingston. All that I can offer them at this stage is the support of all the members who are here this evening and that of other members who could not be here. We will continue to offer them the support that they need at this difficult time.
I, too, begin by congratulating Angela Constance on securing this evening's debate. The issue of Bausch & Lomb is an extremely important one to the company's many excellent employees and their families, but it is also important to the West Lothian economy and the Scottish economy as a whole.
I am sure that every member in the chamber was disappointed to learn of the 500 job losses. We first heard about them in September last year. They were implemented in part in December and will take place later this year and into 2011. They come at a particularly worrying time for unemployment in Scotland as a whole.
The manufacturing sector has had a tougher time than many other sectors. In June 2006, 225,000 people worked in manufacturing in Scotland but, in June last year, the figure was down to 203,000. I acknowledge the Scottish Government's efforts through the Scottish manufacturing advisory service. It has improved its efforts, but I wonder whether more can be done for that specific sector.
I am intrigued as to exactly what more the member thinks could be done than is already being done and whether that would amount to very much without the fiscal powers to which Angela Constance referred.
The fiscal powers argument can be treated separately from our consideration of the manufacturing sector. I have already mentioned the manufacturing advisory service, through which the Government has made particular efforts, while the Government also has powers in relation to skills and education. Things can be done to help manufacturing without full fiscal powers, so we do not have to get into that debate.
I was disappointed and surprised by the company's decision for two reasons. One relates to the criteria that the company set out in a press release in September last year. The four criteria on which the decision to close the Livingston plant rather than the Waterford or Rochester ones was based were:
"proximity to established research and development resources, total cost savings, global operational efficiencies, and future investment potential."
It is fair to argue that, across the spectrum of those criteria, the Livingston plant fares pretty well and that it has a strong case for continuing. The decision was therefore disappointing given the specific criteria that were set out.
The other reason why we are disappointed is the proud track record of the workforce at the plant, to which Angela Constance referred. The company's press release stated that the decision was
"by no means a reflection on our employees' professionalism, dedication, or efforts."
That reiterates the point that the workforce had done a good job, was doing a good job and, I am sure, will continue to do a good job until the plant ultimately closes.
As the decision has been taken and the implementation has begun, the most important issue now for the employees and their families is the future. I ask the company to stick closely to the spirit that it laid out in the press release, which states:
"We will do everything within our ability to ensure that their needs and concerns are listened to with the utmost respect."
It is critical that that is followed through, in spirit and in letter.
I call on the Government to continue the work that it has done, through the PACE teams that are trying to find alternative employment and through the initiatives to which Mary Mulligan referred such as the job shop and the advisory centre, so that a strong and powerful short-term hit to those employees and the community does not turn into medium and long-term damage.
I, too, congratulate my colleague Angela Constance on securing this debate on the Bausch & Lomb plant in her constituency. To say that there are parallels with the situation in Kilmarnock with Johnnie Walker and Diageo would be an understatement. We are talking about a company that is operating profitably in a global recession with increasing demand but which has chosen to downsize and shed hundreds of loyal workers. However, as I understand it, unlike the Johnnie Walker case, there are no real job gains elsewhere at the Bausch & Lomb plants in Ireland or the USA. Manufacturing systems are simply being transferred to Waterford in Ireland with no increase in staffing expected, and there are perhaps only a handful of new jobs in the USA.
So what is going on? I am reminded of the speech that Ross Finnie gave during my members' business debate on the Johnnie Walker situation. He talked about the movement of employment around the world in the blink of an eye and with no thought for the effects on the communities that give companies the vast profits that they enjoy. Before I entered the Parliament, that was the kind of speech that I hoped to hear in it. He homed in on problems that we face but which Governments of all kinds do not yet seem able to do much about.
Every Government will try to lure big employers to their country with tax breaks and incentives of one kind or another. That is to be expected of them—it is their duty to do so. However, what does that mean for the communities that are left behind when a corporate crunches a few numbers on an Excel spreadsheet and comes up with a closure plan? For the corporate, it is simply sound business. The numbers all add up, the cost base is reduced and, ultimately, the company might grow and develop. However, for the communities that are left behind in the wake of such decisions, it spells disaster: loss of a main earner's wages in a family, which leads to the potential loss of a family house and the consequences of that.
As my colleague Angela Constance pointed out, why did it make sound business sense only a few years ago in 1996 to acquire this Scottish company—an award-winning operation? Why does it make sound business sense now to close it down while it is still healthy? The reasons can perhaps be seen if we examine how the corporates acquire businesses around the world by buying up potential opposition only to consolidate a few years later by downsizing their operations. They lose nothing, but we in Kilmarnock and Livingston are to lose everything. How can that be right? How can it be the correct approach to developing businesses for a successful future that will sustain all our communities?
If truth be told, the corporates—while claiming that they have a corporate social responsibility—rarely act to support the communities that give them their profits. Yes, they might offer enhanced severance or perhaps work with us to help to retrain and reskill those who are to lose their jobs, but when the dust settles, they are off in pursuit of the next acquisition when the time is right. Surely that is short-termism—reacting to today's circumstances, rather than planning for a solid future.
My hope for the workers at Bausch & Lomb and the workers at Johnnie Walker's—and others who will surely follow—is that debates such as this will force national Governments, which have the powers, to open their eyes to the huge problems that are being handed over to them by corporates that simply want to move around the world to make a fast buck no matter the human cost. When we open our eyes to those problems and begin to tackle them seriously, perhaps people in Kilmarnock, Livingston and around the world who are needed one day and on the scrapheap the next, will in future be able to work for companies that care not just about their profit and loss accounts but about the people who work for them.
I am delighted to support the motion lodged by my friend and colleague Angela Constance.
I, too, welcome Angela Constance's initiative in seeking—and, even better, in obtaining—this debate. Her introduction was so good and comprehensive that I can be relatively, and perhaps mercifully, brief.
Angela Constance, Mary Mulligan and I have worked together co-operatively on this issue on a non-party basis for the past four months. I join Mary Mulligan—I mean this genuinely—in thanking the cabinet secretary, John Swinney, for meeting us on a number of occasions and updating us on the issue in very great detail. I must confess that he has handled the matter with great skill, diplomacy and genuine concern. I was reminded by Willie Coffey's speech of an interesting contrast with the First Minister's intervention over Diageo, which was a bit more like a bull in a china shop.
All that work has provided some help for the workers who are being made redundant, although, sadly, all our efforts have not persuaded Bausch & Lomb to change its mind. As Angela Constance said, the decision to close the Livingston factory, which was announced on 4 September, was misguided. I was going to say that it was short-sighted, but I thought that that might sound a bit trite.
One of the worst aspects is the slow death of the operation, as each production line is closed one after the other and transferred to Waterford. That will be real torture for the workforce, as well as involving great overheads for Bausch & Lomb as it continues with reducing production at Livingston.
As Angela Constance said, the loss of 500 jobs in Livingston is a very significant loss of employment for that one town. It will be difficult to replace those jobs.
As Gavin Brown said, Mr Ostrov, the Bausch & Lomb chairman and chief executive—I note that he has both those jobs and that he gets paid substantially and handsomely for both of them—said that the closure of the factory is not in any way a reflection on the performance, professionalism and dedication of the Livingston workforce. That is certainly true, but I am sure that Gavin Brown agrees that it is of scant comfort to those who are being paid off.
Bausch & Lomb's decision reflects a tendency, which Angela Constance, Willie Coffey and others have mentioned and which is all too prevalent, for multinationals to come to Scotland to take assistance from the Government and to move on when that suits and is propitious for them. In that connection, will the cabinet secretary confirm exactly how much public money in total, including regional selective assistance, Bausch & Lomb has been given? Is Angela Constance correct that £1.1 million will have to be returned? It would be useful to have the figure confirmed. I join her—and others, I am sure—in making a plea to the cabinet secretary to pledge that that money will be recycled to help to provide jobs in Livingston in particular and in West Lothian in general.
I welcome the support that the PACE, Scottish Enterprise and Jobcentre Plus group is giving, particularly to the first 45 workers who have left the plant. Will the cabinet secretary say how many of those who have left have found alternative employment? It would be useful to know whether all the help that is being provided has had some effect.
One of the key people is Linda McPherson—Scottish Enterprise's east region director—who gave Mary Mulligan and me a helpful briefing on the subject. She was really clued up about what was going on and is working hard to help. She mentioned the possibility of Bausch & Lomb establishing a research and development facility in pharmaceuticals, which the cabinet secretary mentioned when we met him and which the First Minister made great play of following his meeting with Gerald Ostrov. Will the cabinet secretary update us on whether progress has been made on that proposal?
Linda McPherson also said—and the cabinet secretary confirmed—that the factory's former owner, Ron Hamilton, might be willing to become involved in some way in providing alternative employment. It would help to have an update on that, too.
I had better finish now, to leave the cabinet secretary plenty of time to answer those questions and others that have been asked. Before I finish, I gently advise him, Angela Constance and Willie Coffey that I know, from my having spent an awful long time—perhaps too long—in politics, that, sadly, Governments can do relatively little in the face of big multinational companies, as Willie Coffey in effect admitted in his speech. That is—sadly—the case even for Governments that have all the powers that Angela Constance and others would like the Scottish Government to have. However, that should not prevent the Government and the Parliament from putting as much pressure as we can on Bausch & Lomb. I am glad to have joined Angela Constance and others in being part of that.
I, too, congratulate Angela Constance on bringing the debate to the Parliament. The parallels—and the lack of them—between the closure of Bausch & Lomb's Livingston manufacturing plant and the closure of Diageo's Kilmarnock factory have been drawn. Both factories were previously funded through regional selective assistance and the Scottish business grants scheme. Diageo was awarded £1 million in 1999, which it received between 2002 and 2004, but its obligations under the RSA grant agreement expired in May 2007, so I presume that we did not claw back anything from Diageo.
The situation calls into question the function of the regional selective assistance scheme. Do we need new guidelines that recommend a longer expiry period, so that companies that are awarded money are bound to more stringent obligations? Perhaps a penalty clause should apply to the first few years of an agreement, so that companies incur an added penalty if they suddenly pull out early.
An earlier speech drew our attention to the possibility that one reason why Bausch & Lomb went to Waterford was that redundancy payments there would cost more than will such payments in Livingston.
Getting firms into Scotland by way of grant giving is a two-edged sword: we benefit but we also suffer. In the blink of an eye, one change in the world economic situation can lead companies to simply pack up and go. The greater the number of foreign companies in Scotland, the more vulnerable we are, particularly in a crunch time such as this.
I understand that, in 2007-08, 39 of the 164 companies that received funding were foreign based. Those companies—24 per cent of the total—got half the £87 million that was made available in that year. That figure seems to be disproportionate. Does the cabinet secretary agree that now is the time to make the Scottish business grant scheme focus on small local enterprises in addition to offering genuine long-term safeguarding of local jobs?
I thank the cabinet secretary for his attention.
I welcome the debate that Angela Constance has instigated. I pay tribute to the way in which she has assiduously pursued this very serious issue on behalf of constituents in her Livingston constituency.
Following the announcement, I met Angela Constance on a number of occasions to discuss the issue. I was delighted that she joined me in the visit that I paid to the plant in September last year to see for myself the expertise to which the company clearly made reference in its announcement and which has been a hallmark in what has been said in today's debate. I welcome my discussions with Mary Mulligan and George Foulkes on the issues that Bausch & Lomb's decision has raised.
The Scottish Government deeply regrets Bausch & Lomb's decision to close its facility in Livingston with the loss from the West Lothian economy of 500 highly-skilled jobs. The decision is of itself a serious one that has caused a great deal of concern. It is made all the more serious by the fact that, in all the explanations about the decision, the company has paid warm and fulsome tribute to the achievements and quality of the personnel—its leadership and employees—who worked in the plant.
When I visited the plant, I saw for myself not only a committed and energetic management, but a committed and loyal workforce. One point that struck me most acutely—it relates to Mr Brown's point on intervention and support for the manufacturing sector—was that the plant is an advanced manufacturing plant and not one that has faced the challenges that some of our traditional manufacturing plants must face. The plant is highly efficient and performs exceptionally well—indeed, it was acknowledged to be a top Bausch & Lomb performer. That raises the serious question: why on earth is such a jewel in the crown of the group to be closed? The decision raises a number of questions in my mind. The employees have every right to feel bewildered by the decision by the company to which they have given great commitment and loyalty.
Of course, at the heart of the success of the company is the expertise and contribution of management and staff such as those at the Livingston plant. Angela Constance illustrated the point most effectively when she spoke about the quality of the manufacturing operation and about its success and reliability. The point was reflected in the concerns that members have expressed today.
When the Government became aware in August last year that Bausch & Lomb was considering the proposal, the First Minister immediately made arrangements to meet the company's chief executive, Gerald Ostrov. That contact with the First Minister and officials has been maintained. I welcome the warm tribute that George Foulkes paid to the contribution of our Scottish Enterprise personnel, led by Linda McPherson, who have done an excellent job—not just in the light of the closure announcement, but well before that—by maintaining regular and open dialogue with the company about how Scottish Enterprise and Scottish Development International can assist in its development. Mr Brown mentioned the Scottish Manufacturing Advisory Service. In my estimation, the service is greatly appreciated by the companies that benefit from its support, as is confirmed by comments that I hear from the manufacturing sector.
As I said, I visited the plant in September, along with officials from Skills Development Scotland and Scottish Enterprise. We have maintained regular dialogue at ministerial and official levels, in order to do exactly what Angela Constance has asked us to do—to ensure that no stone is left unturned in trying to find other opportunities that may emerge from this regrettable closure.
Did the possibility of R and D being located in Livingston, to which George Foulkes referred, come up in the course of the discussions? If so, does money have anything to do with the decisions that will be taken on the matter?
R and D came up: George Foulkes was right to say that it has been a focal point of the discussions about future activities that the Government has pursued with Bausch & Lomb. It would be premature for me to speculate about what issues may affect decision making, but I assure the Parliament that those discussions are still under way. Members will appreciate that decisions about research and development facilities are not taken swiftly and are part of long-term discussions. The Government will give the time that is necessary to ensure that all questions are explored adequately.
I turn to the impact on individuals. As members have recorded, the loss of employment at Bausch & Lomb has started. I do not have with me details of the destinations of the 42 members of staff who have lost their jobs, but all have been voluntary redundancies, so there may be other circumstances that have led individuals to take decisions about their destinations. I welcome the fact that there has been an open dialogue between trade unions and human resources representatives in Bausch & Lomb that has enabled them to reach agreement on an enhanced redundancy package. I hope that will assist individuals in finding alternative employment.
The partnership action for continuing employment is active in drawing together public sector agency support for each individual who is affected. The response to each redundancy is tailored to meeting individual needs and local circumstances. I assure Mary Mulligan that every flexibility will be deployed to ensure that individuals receive the support that they require.
I conclude with a couple of remarks about the wider economic issues. Angela Constance was right to explain that the West Lothian economy is experiencing a level of unemployment that is higher than the Scottish average. The Government is aware of that and is making every effort to address it. That is why we make efforts to have dialogue with individual companies and other developments, and why we have continuous dialogue with West Lothian Council on ways in which we can support the development of new employment opportunities in West Lothian. I assure Angela Constance that those discussions and that intervention will continue on the Government's behalf.
Unsurprisingly, given the experience that he has had in his constituency in recent months, Willie Coffey gave an immensely thoughtful reflection on the power of global companies and the impact that that can have on communities. I know how deeply he feels about the implications of the Diageo decision for the communities that he has the privilege to represent, and it is clear that he empathises with those who face challenges in Livingston and West Lothian. I stress that the Government is alert to those concerns and to the challenges that exist in relation to finding alternative employment.
I assure Angela Constance and other members that the Government's economic strategy is focused on investing in new skills and new opportunities in the West Lothian economy. We will continue with that as our focus and will work with West Lothian College and other players in the local economy to find appropriate opportunities for individuals.
I assure the Parliament that the initiatives that emerge from the closure announcement will be fully advanced and explored by the Government in order to try to find new economic opportunities and to ensure that people in West Lothian are able to enjoy economic and employment opportunities that are suitable for each individual concerned.
Meeting closed at 17:40.