Continental Tyres
As announced this morning, the first item of business is the emergency debate on motion S1M-158 in the name of Lord James Douglas-Hamilton on the subject of parity of treatment by Continental Tyres. There is also an amendment to that motion. Lord James, you have three minutes to move the motion.
Motion S1M-158 arises from a meeting yesterday that MSPs had with employees of Continental Tyres. That meeting was attended by Mary Mulligan, Pauline McNeill and Bristow Muldoon from the Scottish Labour party; by Margo MacDonald, Fiona Hyslop and Lloyd Quinan from the Scottish National party; by Nick Johnston and me from the Scottish Conservative and Unionist party; by Tommy Sheridan from the Scottish Socialist party; and by Robin Harper from the Green party. Apologies were received from Margaret Smith. As we can see, there was cross- party representation at the meeting.
The employees made it clear to us that they would press for the best redundancy package available. They pointed out that they have worked flat out; that they have had to work more hours for the same pay; that their rates of pay have been reduced; and that they had forgone their annual pay rise. Broadly speaking, there is a shortfall of 40 per cent between the offer to the Scottish work force of 800 employees and the offer that was given a few years earlier to the Irish work force at Semperit.
I submit that to offer the Scottish work force 40 per cent less than comparable Irish employees is neither generous nor reasonable. In the past six months, Continental has recorded massive profits that represent a 30 per cent increase on the previous record year, so the company is in a position to give equivalent treatment to the Scottish employees.
Tomorrow, Dr Holzbach, who is representing the company, will visit the factory for last-minute negotiations on the closure package. In such circumstances, it is reasonable for the Parliament to be able to express a view. Mr Henry McLeish has lodged an amendment to my motion. recommend that the Parliament accepts the amendment because it urges the company—as Mr McLeish has—to reach a "fair and equitable settlement". I interpret the phrase "fair and equitable" to mean parity of treatment, broadly speaking. I am not interested in this or that
detail—a 40 per cent differential is far too great.
Mr McLeish also makes it clear in the amendment that he will meet Dr Holzbach tomorrow. If his amendment to the motion is passed, he will be able to present Dr Holzbach with the Parliament's findings, which I hope will provide better redundancy terms for the employees of Continental.
I move,
That the Parliament calls upon the Scottish Executive to take up with the Continental Tyre Company the need to give their Scottish employees parity of treatment by offering them an equivalent package to that offered to and received by their former employees in Semperit in Ireland, in view of the impending visit on Friday to Newbridge of Dr Holzbach, senior executive member of the Continental Tyre Company.
I call Henry McLeish to move the amendment.
I move amendment S1M-158.1, to leave out "calls" to end and insert
"notes that any financial settlement for workers at the Continental Tyre Company is a matter for negotiation between their Trade Union representatives and the company; notes that the Deputy Minister for Enterprise and Lifelong Learning has urged the company to reach a fair and equitable settlement; notes that negotiations are in progress; hopes that they will reach a quick and positive outcome which takes account of all the relevant circumstances; and notes that the Minister for Enterprise and Lifelong Learning will bring this motion to the attention of the Company when he meets them on Friday 17 September."
I will call Mr McLeish to wind up the debate at 14:25.
I welcome the opportunity to debate Continental's decision to close the Newbridge tyre operation in my constituency at a cost of 774 jobs. Over the past few months, I have met representatives of the work force on many occasions and, having spoken to them again today, I know that they, too, welcome the debate and the support that they have received from MSPs on all sides of the Parliament.
Members from all political parties have signalled their support for Continental workers, which sends a strong message to Continental that the Parliament and the parties in it are determined to ensure that Continental workers are treated fairly. I will take that message into the meeting that I—as the local MSP—will have tomorrow with Dr Holzbach, one of Continental's senior German management.
Continental has taken a commercial decision to move out of Scotland into areas such as eastern Europe, where operating costs are cheaper. The company has turned its back on workers who have jumped through hoops for it and who have accepted redundancies, new shift patterns and loss of pay over the past year to save their jobs.
Continental has turned its back on a skilled work force that produces a quality product. It has turned its back on a work force that was in the process of turning losses of £8 million last year into a profit this year. Producing 14,000 tyres each day, the Continental plant at Newbridge would this year have finished in the black. That turnaround would have been due to the work force's efforts.
At the time of the ministerial statement, I asked Mr McLeish what action the Executive was taking to make the point to the company that the work force should be dealt with fairly. I believe that his response on that occasion, the conversation that we have had today and the amendment that the Executive has lodged, give a clear signal that the minister and his deputy have been making representations in that regard and that Mr McLeish will continue to do so tomorrow.
Continental has made much of the worsening worldwide tyre market and the strong pound. Members should be in no doubt that its decision to abandon Newbridge and its Scottish work force is because it can make greater profits by moving from the diverse, small, skilled plant at Newbridge to large purpose-built plants in eastern Europe or Portugal, where EU grants are the sweetest. A visit to Continental's website tells us about the company's profits as of 12 August 1999:
"Contrary to the trend in the tyre industry the Continental Corporation is reporting substantial gains in sales and earnings. The first half of 1999 sales leaped by 54 per cent and their earnings jumped 38 per cent."
Passenger tyre sales are up 10 per cent; commercial vehicle tyre sales are up 22 per cent; and so it goes on.
Meanwhile, Continental is offering its Scottish workers less of a settlement than was offered to Irish employees in 1996. There is no justification for that. The Newbridge workers should at least have parity with the Irish work force. An extension of what is on offer to the Scots to bring them into line would cost between £4 million and £5 million. Given the commitment shown by the workers and the level of profit that Continental continues to make, I believe that it should be prepared to pay that price.
Wind up now, please.
The Executive and this Parliament should put pressure on Continental to pay that price.
There is no question but that the workers at Continental have done everything in their power to enable them to continue in employment. Unfortunately, they have been unsuccessful. My main concern is to ensure that Continental, which has taken the decision to pull out of Newbridge and leave the people with no jobs, is made to recompense those workers as strongly as possible.
I welcome tomorrow's meeting between the Minister for Enterprise and Lifelong Learning and Dr Holzbach. I am more than certain that the minister will press the claim of the workers and ensure that the deal that they get is the best one possible. I am, therefore, more than happy to support the amendment.
Members will be aware that I have taken up the interests of my constituents who are workers at the Continental plant. The minister may wish that I had not, but that is our duty in this Parliament.
By supporting this motion, the Parliament can stand shoulder to shoulder with the Continental workers in their fight for a fair deal from the general management. A Scottish Continental worker facing redundancy is worth no less than an Irish worker—and certainly not 40 per cent less.
In a number of discussions that I have had with the work force, the management and the unions, I have been struck by their compelling case. Workers have taken a wage freeze, increased hours and productivity, and changed their shift patterns on a number of occasions to make the survival package work—and it was working. Members should be aware that, recently, high- performing machinery has been removed from the plant in the face of a slump in demand. In the past three months, 120 tyre moulds have been removed. How does that square with a market downturn? They are obviously needed somewhere. I understand that Ford is now refusing
Continental tyres made in eastern Europe as those plants do not have the assurances of the International Standards Organisation that Newbridge can guarantee. As Margaret Smith said, Continental made substantial profits recently. It has invested £20 million in sponsoring the Champions League to promote its good name and reputation. That reputation is endangered by its refusal to give its Scottish workers a fair deal and the respect due for the hard work and commitment they have shown.
If we are talking about champions, this Parliament must champion Scottish workers. Independent Ireland has tough labour laws; we do not have those powers but we can lend our support.
The Parliament, in calling for ministers to take this message to Dr Holzbach, can show a sense of strength and solidarity with the Continental workers. They most certainly deserve our support and I am pleased that the minister's amendment gives them that.
At yesterday's meeting, the Continental workers showed that they are brave and determined people who have finally accepted their fate; they are doomed.
I am pleased that the minister will call for equity of treatment between Ireland and Scotland, but we need to go further. Once the issue of the redundancy payments is settled, we must examine what will happen next. I will request that the Enterprise and Lifelong Learning Committee speak to a representative number of the workers at Newbridge to get their views on the help that they are being offered. At first examination, the help does not seem to meet entirely the work force's needs. The workers at Continental have specific skills; they need retraining and they need it quickly.
As Fiona said, tyre moulds have been removed to Romania and Ford has rejected the tyres made in that country on grounds of quality. Now it appears that production may have to continue on certain models to allow Continental to fulfil its contract with Ford. That means that the workers still do not know when their jobs will cease to exist, which is very disturbing for people who have children to feed and mortgages to pay.
Much has been trumpeted about the number of jobs that were created by the task force in Haddington. What was the quality of those jobs and what were the rates of pay? The Continental workers are highly paid and skilled and they should not be asked to work for minimum rates in call centres.
Finally, I refer to my remarks to Mr McLeish regarding the redevelopment of the site and the apparent difficulties with the Civil Aviation Authority.
I support the motion.
I add my congratulations to the minister on addressing this issue just in time. I sincerely hope that he will tell the gentleman who will arrive from Germany exactly what we feel about the decisions that have been made.
I accept that the closure is a done deal, but I will take members forward, if I may. As a member of the Enterprise and Lifelong Learning Committee, along with Nick, I am concerned that although the training programme is perhaps better than we first feared, it might have been put in place a bit earlier. Margaret Smith referred to the number of times she has spoken with the management over a considerable period of time. Why, then, was the local enterprise company not aware that there was a possibility that the employment prospects at Newbridge would change? If it had been aware of that, we would not have had 300 blokes waiting to go on a forklift truck driving course knowing that the likelihood of still being employed at Newbridge while the course was open to them was very low indeed.
I regret the fact that the jobs are to be lost and I regret the circumstances in which that will happen. I sincerely hope that the minister will get the money that the blokes are due. However, I also hope that we will learn something from this and that the rapid response unit, which the minister promised to the Enterprise and Lifelong Learning Committee, will be put into effect pronto.
Lloyd Quinan, you have two minutes.
I welcome Henry McLeish's amendment. I also welcome the opportunity to have cross-party agreement to support the workers at Continental.
The Continental situation reminds me of what happened at the Caterpillar plant in Tannochside, Lanarkshire in 1987. Unfortunately, the Government of the day did not fight for the rights of the workers and this Parliament was not in existence to do so. In light of the bad press that the Parliament has had during the past few weeks, it is marvellous that we are able to show together that we are prepared to fight for industrial workers in Scotland. That alone makes the Parliament worth while.
A warning about Continental and its behaviour across the world was given on Monday to the Trades Union Congress. The American Federation of Labor and Congress of Industrial Organizations representative warned the congress that Continental, in all cases, attempts to get away with the minimum payment.
I will remind members of what the Irish workers were able to achieve with the support of their Government. Let us hope that pressure from here will have the same effect on Continental. The Irish workers got five weeks' pay per year of service, plus their statutory entitlement. The Irish statutory entitlement is half a week per year, but with the strength of the labour courts the Irish workers were able to achieve more. On top of that, a further lump sum of a 3 per cent increase over a three-year period was paid. We should be looking for nothing less than that. I support the amendment.
I want to thank colleagues for their constructive contributions to this brief debate. I also want to echo the sentiments expressed by Margo MacDonald and Nick Johnston about the need for the existing package to unfold to the benefit of the work force. If there are any concerns whatever, members should come directly to me. I will tackle any genuine concerns that the local MSP or others have.
I want to thank Lord James for his comments, which were, as usual, courteous. We have tried to work in such a way as to lodge an amendment that all members can support. Members in all quarters are agreed that this is an issue on which we should not be divided. We seek the best for the work force at the plant and it would send a powerful message if that were the result of our deliberations.
I have listened with great care to what members have said. I need hardly do so, but I stress that I share the widely expressed concerns for the future of the Scottish employees of Continental. I have already expressed my strongest sympathy for the work force and their families and I have made it clear that the Scottish Executive will provide or endorse whatever support is appropriate for the work force. However, as I said in my statement on 1 September:
"It is not within the power of the Executive or this Parliament to deliver on redundancy packages." —[Official Report, 1 September 1999; Vol 2, c 15.]
It is not for the Scottish Executive to seek to negotiate the terms of redundancy packages. That is clearly a matter for the unions. I have been in close contact with the union officials, in particular Harry Donaldson of the General, Municipal, Boilermakers and Allied Trades Union, on many occasions, most recently at 11 o'clock today. The union officials are aware of my—and the Parliament's—support for their efforts. I respect their judgment and competence and we wish them every success in achieving an equitable outcome. As Margaret Smith, the local MSP, said, there are meetings tomorrow with the work force, the task group, the local MSP and me.
While I understand the concerns that lie behind the demand for parity of treatment, we must recognise that different countries, such as
Germany and Ireland, have different labour laws and that different circumstances apply. Those factors have a clear impact on redundancy packages, which are negotiated. It is not always appropriate to draw comparisons. However, we have urged the company to provide employees with the most generous redundancy package possible. That is the sentiment of this Parliament and we reinforce that again today. We have not budged from that position.
When my colleague, Nicol Stephen, visited Continental's management in Hanover a few weeks ago, he emphasised the importance that we place on the settlement package for the work force and on full co-operation with the action team on retraining for new employment. As a result of that meeting, Dr Holzbach is visiting the Newbridge plant tomorrow. I will meet him during the day to continue discussions.
In the spirit of my amendment, the motion that we approve today will be presented to Dr Holzbach to show our sense of purpose and unity and to reflect the fact that we want the best possible package to emerge. However, eventually, it is up to the trades unions and the company to deliver on that.
We have also stressed the importance of carrying out an economic and financial appraisal quickly to establish future options for the plant. That, too, has been agreed.
We will continue to support the efforts being made by so many agencies to ensure the best possible outcome for the workers at Newbridge. I hope that we can constructively channel the concern and commitment of everyone involved, including that of members here today, to achieve that goal.
In the spirit of co-operation and solidarity, it is vital for this Parliament at times to speak to the rest of Scotland with one voice. We are doing that today. I hope that colleagues will accept the amendment, which I discussed earlier with Lord James and which represents the best way forward. Let us ensure that we get the best deal for the workers. That is what tomorrow is all about.
I am afraid that under standing orders, the decision on the motion and the amendment will be made at decision time at 5 o'clock.