Motorola
The next item of business is a statement by Wendy Alexander on Motorola. The minister will take questions at the end of the statement, therefore there should be no interventions during it.
I am sure that everyone in every party was shocked and dismayed by Motorola's announcement yesterday that it proposes to close its plant at Easter Inch in Bathgate. The news was devastating to the work force and I am sure that everyone will agree that we now have to do everything possible to explore every avenue for a way forward.
Today I will give further details of how we intend to proceed with the clawback of the regional selective assistance payments that were made to the company. I also want to share with members the plan of action that has been put together, including how we proceed with Motorola as a company. I would also like to give some details on the task force that has been set up to deal with the situation and announce some additional funding to support the action that the task force will take.
As members will be aware from comments that were made yesterday, we have been in constant contact over the past few weeks with Motorola, here and in the United States of America. Many people have been involved in negotiating hard with the company, right up to the announcement yesterday, to try and reverse the decision. However, in the final analysis, Motorola decided that the financial benefits of keeping open its German plant outweighed the fact that the Bathgate plant is highly productive and profitable. That makes the decision all the more disappointing.
The decision was on a knife edge, but Motorola has chosen to propose shutting Bathgate. In doing so, it has gone against the very strong track record of the Bathgate operation in terms of the efficiency, profitability and quality of the Scottish work force. Contributory factors—which, as the company has made clear, are very complex—have undoubtedly been the down-turn in the United States, worldwide changes in the mobile phone market and financial issues surrounding Motorola's performance in different markets. However, all of that is cold comfort to the work force at Bathgate.
None of us will give up the fight to save jobs, but it is clear that Motorola's intention is to close Bathgate. We need to plan for that eventuality. Obviously, this is an extremely difficult time for all those affected by the announcement. Our immediate priority must be to secure the best future opportunities for those affected.
I turn first to regional selective assistance. I have made it clear to Motorola that we will take steps to recover the £16.75 million in RSA that we have paid to the Bathgate plant over the past 6 years. That will be the largest ever single clawback of RSA in Scotland. Thereafter, our first priority is to pursue with Motorola future options at the Bathgate site. We need to explore every possible future use of the factory. The First Minister and I discussed that in more detail with trade union representatives this morning. I relayed to the chairman of Motorola in the UK, when we spoke on Monday evening, that that was something we wanted to pursue. My officials have been back in touch about the future of the plant. A meeting has been arranged for Monday between my officials and Motorola to discuss the options for the plant.
There are a variety of options that we want to explore with the company. Although the mobile phone market is difficult, there may be a company that is interested in the premises for the contract manufacture of mobile phones or another related product. Other alternatives include a new employer purchasing the site. We will want to ensure that the best option is secured for the future of the site.
Scottish Executive and Scottish Enterprise officials stand ready to facilitate those discussions on the use of the property and its marketing, and further support for retraining and employment at the site. I understand that there have already been expressions of interest. As the First Minister and I indicated to the unions, all options will be considered. As an aside, in response to those who say that Scottish Enterprise or Locate in Scotland are past their sell-by date, I want to record here that their expertise has been and will be absolutely critical in securing the best option for going forward.
That brings me to the second part of our response. How will we do it differently? The answer is that we are already doing it differently with respect to global companies and there are ways in which that holds out prospects for those affected at Bathgate. Throughout the negotiations, we have made the case to Motorola that, with the arrival of new high-tech facilitlies and more research-and-development intensive facilities on the horizon, it has opportunities in Scotland. Even with the closure of the Bathgate plant, those opportunities will still hold. What are the opportunities for the Bathgate workers in the other 20 or so Motorola facilities throughout the UK? What, in particular, are the opportunities for the Bathgate work force at the two planned new research and development intensive projects in Scotland?
We will be looking for commitments that Bathgate workers will have access to opportunities at the planned software development centre in Livingston and the planned plant in Dunfermline, including the necessary retraining. Despite the decision towards the end of last year to reconsider the timing of the Dunfermline project, Motorola has emphasised to us its underlying commitment to that project as the cornerstone of its future investment and manufacturing strategy in the UK, based upon the next generation of high-tech semiconductor technology.
It will be high-value jobs that bring security for Scottish workers. Competing on commodity products will never make for job security for Scots. For that reason, Scottish Enterprise has for some time been working closely with Electronics Scotland to ensure that Scotland becomes a global centre for microelectronic design and an internationally recognised location for the production of high-value, leading-edge products.
We need to ensure that all the affected staff have one-to-one counselling support through a specially dedicated rapid reaction team set up under our partnership action for continuing employment initiative—PACE. The task force membership will include Scottish Enterprise Edinburgh and Lothian, the Employment Service, West Lothian Council, the careers service, the Benefits Agency, the Scottish Trades Union Congress and the Executive. The task force will oversee the action plan to meet specifically the needs of the Motorola workers. I want an on-site job shop. I also think that we should be looking for a financial contribution from Motorola towards the outplacement costs. I note in passing that Compaq, which I visited last week, has agreed to contribute to the outplacement costs for the workers that it is making redundant. Motorola should do the same. We are also exploring the opportunities for European moneys, and the task force has begun its work.
We in the Executive will also do our bit. We are setting aside up to £10 million to help fund the steps that I have outlined. The actual sum that remains to be spent needs to be agreed in respect of the package of measures that it is spent upon. I am keen to ensure that we spend what is needed in the best way. It is not yet clear what different elements will be required. Perhaps there will have to be property assistance to a new employer on the site, perhaps there will have to be counselling services, or perhaps contractors will be affected.
Yesterday's announcement was a body blow to the work force. We must all now do everything that we possibly can to assist those affected to find new employment. That is the action that we are announcing today, and the first steps in that process have already begun.
I shall call the constituency member first, followed by the party representatives. I call Mary Mulligan.
I thank the minister for her statement, although I rather wish that it had not had to be made. I know that a lot of effort has gone into talks over the past few weeks, if not months, and I am grateful for that. However, my constituents and those from further afield are very concerned about what their future might be.
At a meeting yesterday evening, we spoke with a worker who is a member of the consultative forum that Motorola has set up. Members of that forum have very little support and backing for how to go about what has formally been announced as a consultation period but which we know is probably an operation in winding down Motorola. Can we offer support to the members of that forum to ensure that they are as involved as possible in the process and are able to give colleagues in the company as much support as possible throughout that process? Can we also ensure that the process involves the unions, which have so far been kept out of Motorola but which, at this stage, could offer a great deal of experience and valuable support to the work force?
I absolutely agree. Before I answer the specific points that she raises, I point out to members that Mary Mulligan has been in daily contact with the members of the Executive who have been involved in those very difficult discussions over recent weeks, and I record our gratitude to her for her work during that period.
To respond to the question, I have indicated that the experience of the trade union movement will be invited on to the task force under the PACE initiative. Slightly more unusually, we are also going to invite the consultative forum to participate in the task force, if it would like to do so. Although others may not have experience of such task forces, it is encouraging to note that a rapid reaction force was set up by the now First Minister when Continental Tyres closed in October 1999. Since that closure, of the more than 800 people who lost their jobs, only 31 are known to be still unemployed today.
There was a similar success rate at Mitsubishi in Haddington, where 280 jobs were lost. Of that number, only 15 remain unemployed today. That is the sort of expectation that we should have and that is the support and expertise that we will be bringing to the consultative forum in the period ahead.
I put on record the SNP's dismay at the closure and the damage done to a loyal and productive work force and to the communities.
The minister is correct to seek the return of £16.75 million of public money from Motorola, but why is a maximum of £10 million being put in to fund the proposals outlined by the minister today? Surely every penny of the £16.75 million should come back and all of it should be ring-fenced and used to assist the people and communities that have been afflicted and affected.
I am grateful for the support of the SNP, on both the clawback and the general need for Parliament as a whole to face this difficult issue together.
I do not want the issue of the money to be a matter of controversy. As I indicated, our first priority is to find the right use for the site. The amount of, for example, regional selective assistance that might be made available to a contract manufacturer or a completely new employer is entirely dependent on the nature of the jobs that are coming and the cost per job that can be supported. European rules are now very strict. I have a marked familiarity with the minutiae of European rules on state aids as they have affected the matter over recent weeks. At this stage, it is impossible to predict what amount of money might be needed to facilitate a property deal or support for an individual employer.
We know that immediate moneys will be required to support the work of the action team. In that area—and I highlighted the example of Compaq—it is important that both the Employment Service and, more important, Motorola are held accountable for making a contribution. All that I am indicating at this stage is that the Executive is willing to act. The critical issue is to accept that we will only know the sums of money needed once we have started to put the solutions in place.
I would like to place on record the profound concern of the Scottish Conservatives at the announcement by Motorola of the closure at Bathgate. We accept that it is grievous news for the local community.
If I may continue with the point raised by Mr MacAskill, can the minister clarify whether the regional selective assistance grant will be paid direct to the Exchequer in Westminster or to the Executive? I am not sure, from the minister's comments in response to Mr MacAskill's question, whether that money will be exclusively deployed to West Lothian. I would be grateful for clarification of that.
The minister, in her statement, mentioned one-to-one counselling and the possible role of the consultative forum. It is very important, if the work force at Motorola is to have a positive prospect of re-employment, that clear guidance is given as to how reskilling and retraining is to be provided. Where is it going to be provided and on what time scale?
On the first point, I confirm that the RSA is paid to the Executive as a whole.
Members will know that money that comes back is not earmarked, per se. I have said that we do not know the sum of money that will be required, because we do not know to what future use the factory will be put and whether the factory alone will be sold to an employer or whether it will be sold on as a going concern. It is not possible to earmark a sum of money for a situation that is, as yet, unknown.
On Annabel Goldie's point about reskilling, I indicated that people would find new jobs through at least four avenues. One opportunity, as I have hinted, is if another manufacturer is attracted to the site to provide employment and it would be a matter of how many of those employed would come from the existing work force.
The second opportunity is at Motorola's other facilities, including the two that are planned for development. Workers may be retrained for those opportunities, within Motorola but at other locations.
The third opportunity, which I hinted at, is that Electronics Scotland and Scottish Enterprise have been working closely to produce an electronics skills plan. As I understand it, that is now with the executive of Electronics Scotland; we expect it to be signed off very speedily. It will lay out more extensive plans for upskilling within the electronics industry as a whole.
The final avenue, which will form the preoccupation of the rapid reaction force, focuses on opportunities outwith Motorola, the electronics sector and the factory site for those who seek employment elsewhere. There will be a variety of retraining options, depending on whether people want to stay in the company or in electronics, or want to go elsewhere.
On behalf of the Scottish Liberal Democrats, I extend sympathy to the workers and their families who have been so deeply affected by this tragedy.
First, I return to the point that the previous two speakers raised. Although I understand the minister's point about not knowing whether £10 million or £16.75 million will be required to address the tragic situation in Bathgate, what we are looking for today is a commitment that she will not rule out using the whole £16.75 million to ensure that a company takes over the factory in the future and that jobs are found.
Secondly, the minister mentioned that there are other interested parties. How many companies have expressed an interest in taking over the factory? Will she provide more information on whether anyone in the mobile phone manufacturing sector has expressed an interest?
Finally, Motorola has emphasised its underlying commitment to setting up the project in Dunfermline. However, has the company said when it will do so?
I am happy to make it absolutely clear that we do not rule out using further moneys. However, that is entirely dependent on the site solution, which will be a complete unknowable until we have discussions with the company. The other unknowable is how many of the work force will want to take redundancy. At the moment, there is no indication of the sort of package that will be offered and there is no age profile of the people who will accept that package. Furthermore, the rapid reaction team intends to consider not only the impact on Motorola but the impact on the contractors affected. As a result, we might have to do more with the Scottish enterprise network as a whole, because many of the people affected do not work at the plant but work with contract manufacturers elsewhere in Scotland.
As for other expressions of interest, such matters are inevitably commercially confidential. I will confirm that officials are meeting Motorola on Monday; it is important to get the options on the table relatively early so that people feel that progress is being made. On the specific point about the likely opportunity for contract manufacturing in mobile phones, members might know that Motorola has closed or withdrawn from four major mobile phone facilities around the world—two in the United States, one in Dublin and one in India. The Dublin facility was sold to Celestica, which was involved in the contract manufacture of mobile phones. However, it is fair to say that, in the face of the global down-turn in the mobile phone industry, that option is least likely. The anticipated market this year was 600 million units, but only 400 million units are likely to be sold and Motorola's market share has been halved over the past couple of years. As a result, although mobile phone manufacture is a technical option, the more likely options are contract manufacture of another product or a new employer who would buy the site to make a different product.
As for the status of Motorola's commitment to Dunfermline, we have stressed the importance of the Dunfermline facility throughout the project. It would be the cornerstone of a Scotland-based development and manufacturing capability for Motorola for the next generation of semiconductors. The company has indicated that, as soon as market conditions improve, it expects to proceed with the project, which would create in excess of 1,000 jobs.
Understandably, a large number of members want to ask questions. However, I should point out that this subject is also relevant to the next debate. If members who want to speak in that debate feel that they can withdraw their questions on the statement, more members will be able to participate now.
I express my sorrow at the devastating news of the proposed closure of the Motorola plant and the effect that it will have on communities and families not just in West Lothian, but right across central Scotland.
I recognise the considerable effort that has been made by ministers in the Scottish Executive and the UK Government, including the Minister for Enterprise and Lifelong Learning, the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Foreign and Commonwealth Affairs, among others. Many proposals and suggestions were put to Motorola in trying to persuade the company to remain on the site. I further welcome the fact that the minister intends to continue to explore all possible avenues to retain jobs at the Bathgate plant and the resources that will be given to the rapid reaction team.
Mary Mulligan raised the issue of the consultation process at Motorola, about which many concerns have been expressed—I know that the UK Government is consulting on that. Has the minister had any discussions with the UK Government about that consultation process and does she anticipate possible changes in legislation on consultation?
I record my gratitude to Bristow Muldoon, who, with Mary Mulligan, has been close to this issue at every stage and has, in the past 24 hours, worked with people on the ground to deal with the implications of the decision that has been taken. The Executive stands ready to help the consultative forum in any way that is requested if our support is invited.
The British Government and the Executive share concerns over the lack of consultation and the way in which employees find out about large-scale redundancies. That is why we have said that we need to reconsider the way in which the requirements for consultation are written into British law. Discussions have already begun with the TUC and the Confederation of British Industry, and we recognise the need for further legislative changes. Our reservation about the European Union directive is that, although it covers small companies that employ more than 50 people, progress must be made on the principle of information and consultation. I note that the German Government shares the position of the British Government on that issue.
The redundancies will be a blow to West Lothian and Bathgate. We can bounce back, but we need the vision, the resources and the political will to do so. The plant was built with public money, with roads, power and utilities supplied by the public purse. Does the minister agree that, as the plant has had huge amounts of taxpayers' money poured into it over the years, the public and the local community should be secured something in return? Does she agree that the site is a valuable asset that should be made available to public agencies at no cost, to secure jobs for the future? What will she do to ensure that that happens?
The minister said that the public purse should finance a marketing plan to allow Motorola to profit from the sale of the plant. The workers have paid the price for their good productivity with the loss of their jobs and there must be a payback to the West Lothian economy to secure those workers' futures. What will the minister do about the plant?
That issue is at the heart of the matter. We have clawed back every ha'penny that the company was contractually due to pay back to us because it had not met its obligations, yet Fiona Hyslop is suggesting that we unilaterally appropriate an asset over which we have no contractual right. There are in excess of 3,000 other Motorola workers in Scotland. If I went to East Kilbride or South Queensferry and said, "Sorry, we have no rights over this plant but we insist on taking it back", that precedent would not help us to secure more than 1,000 jobs in Dunfermline.
Nevertheless, as Fiona Hyslop points out, the site is valuable, although in the current economic climate and due to the severe down-turn in the US economy it would probably sell for less than its true value. There is an opportunity for us to work closely with the company, as we have already done. We need to know the time scale for its departure from the plant. The other danger of our appropriating the site overnight is that we do not know what will happen to the workers who will be there for the rest of the year. What time scale does the company envisage? What is the specification of the site? Is the company prepared to make it available with the equipment still on site or does it intend to withdraw that? We will discuss all those issues with the company.
Our obligation as a Parliament is to do the best that we can for the Motorola workers. The expertise in Locate in Scotland, Scottish Enterprise and the Scottish Executive is likely to mean that we are more successful in locating the right buyer or contract manufacturer for the site than we would be if we said to the workers, "There you are, guys—you get on with it."
With the experience of the Continental Tyres company in mind, will the minister assure us that she believes that Motorola should offer employees in Scotland terms no less favourable than those that are on offer to employees elsewhere? Can she explain why German ministers seem to have been more successful in saving Motorola jobs in Schleswig-Holstein than our ministers have been in saving jobs in Scotland?
I hope—more than that, I know—that it is important that we secure better redundancy terms for workers in Scotland than is the case elsewhere. Every worker in Britain has a statutory right to redundancy pay. In Germany, there is no statutory right to redundancy pay. Workers in Germany who face redundancy have to hope for a positive outcome to negotiations on a social plan. I am happy that, in contrast, British workers have a statutory framework that allows them to know what their rights are when they face an unfortunate situation such as this one.
Clearly, our thoughts are with the local community and the Bathgate work force. However, other Motorola facilities were mentioned, particularly in East Kilbride, where Motorola is a major employer, although in a different product line—automotive specialisms. What views have been expressed on the future of other plants in Scotland, particularly the one in East Kilbride? We must continue to work with Motorola, which is a major employer in Scotland and the UK. It is important to get back the money to which we are entitled, but I look forward to telling the people of East Kilbride the SNP's strategy of occupying plants owned by companies.
Andy Kerr makes a serious and important point. Although, as part of the downsizing operation that Motorola found itself having to embark on, 5,000 jobs were lost in the semiconductor sector, only 100 of those jobs were lost in Scotland. That is testimony to the skill of the work force in South Queensferry and East Kilbride. It is tragic that operating losses elsewhere meant that Bathgate had the most skilled work force not triumphing.
Today, my officials have had discussions at the highest level of Motorola with those involved with the semiconductor side of production. The reassurances that Andy Kerr wants are there. We went into this situation with two objectives. The first was to secure the future of the Bathgate plant. It looks as if we have lost that. Our second objective was to anchor Motorola in Scotland, with Scotland being the strategic hub of Motorola's activities in Europe. Motorola will bring two further high-technology research and development facilities to Scotland. That sends an important and useful signal to the workers in South Queensferry and East Kilbride. Those two facilities will anchor Motorola further in this country and could provide opportunities for workers from Bathgate who might be able to find work in them.
Will the minister include in her package a reasonable sum of money and some skilled people who will actively encourage employees of Motorola to set up small businesses of their own and who will provide active support and continuing advice? Over many years, we have failed to encourage small local activity that might grow and have instead concentrated too much on buying in large external activity.
Although in the past we might not have done all that we could have done for people who had been made redundant, if there is any silver lining to a horror story such as the one that we are discussing, it is the success of the wider Lothian area in dealing with major redundancies. I cited Mitsubishi, Continental Tyres and Levi Strauss. In all those cases, there has been a hugely successful effort to get people back to work. That is exactly the skilled expertise that will be brought to bear on this situation and the initiative will include opportunities for people to move into self-employment.
Can the minister tell us whether the skills of the people working in Motorola now can be directly transferred to the promised research and development facilities to which she referred? I remember that, when Continental Tyres closed its Newbridge plant, it was said that the people who were made redundant could not transfer. It would be good to hear what has made the difference between then and now as, if only 31 of the former Continental Tyres workers are currently unemployed, something must have gone right in that case.
Will the package that is to be delivered recognise the knock-on effect of the closure of the Motorola plant on small businesses and other services in the West Lothian area? Although the people who are working in Motorola come from a much wider area than just West Lothian, the people who will suffer most are those who run the other businesses and services there.
Let me start with Margo MacDonald's last point. The remit that we have prepared for the action is not simply to look at how the people who are working at the plant are affected, but to look at the wider impact on the whole community.
On the point about the extent to which the work force's skills are transferable, the candid answer is that we do not yet know—that requires a profile of the skills of everyone at the plant.
In preparing to improve our ability for rapid response, I visited Compaq last week to discuss the 700 individuals there who are likely to face the same difficulties. We spoke in some depth to representatives of the company about how to match the profiles of individual workers to the job opportunities available in the area. That is the sort of exercise on which we anticipate embarking over the coming months.
I endorse what Mary Mulligan and Bristow Muldoon said about the important role of the trade union movement and the need for consultation with the work force. Why is it the case that a Scottish trade union official has to telephone his counterpart in Germany to find out the fate of his members at Motorola in Bathgate? Instead of just looking at the problem, as the minister put it, will she stand up for the rights of Scottish workers by calling on the British Government to sign up to the European Union directive on consultation with and protection of workers?
On the latter point, we think that there needs to be much improvement in the consultation and information framework for workers, which would operate through a workers council framework.
The hostility of Motorola to trade union organisation globally is well known and is a matter that I have raised with the company. Indeed, I have discussed the issue on many occasions. In our recent discussions with the trade union movement, representatives discussed the circumstances in which Motorola has worked with them on such issues as grievance procedure. However, we have made it clear that, in everything that the Executive does, we operate on the basis of social partnership. That is why the trade union movement is fully involved in such initiatives as the action team and the partnership action for continuous employment initiative.
I congratulate the minister and the local MSPs on their clear determination not to give up the fight to save jobs at Bathgate.
On the wider question of our national strategy towards inward investment, is there not an imbalance in a strategy that rewards incoming multinationals with millions of pounds of grants and often provides them with state-of-the-art factories, the best available sites and infrastructure improvements, but that is unable even to persuade those multinationals to recognise trade unions or to consult their workers properly when key decisions have to be made?
Is not the major lesson to be learned from this and other tragedies—including the one that recently affected Dundee, when more than 200 workers in my constituency were paid off by TDI Batteries (Europe)—that the concerns of workers and the legal rights to trade union representation and to proper consultation should be at the heart of our national strategy on inward investment, instead of on the periphery as they seem to be at the moment?
There need to be changes to the legislation on consultation; discussions are already going on with the trade union movement and the CBI on that. However, I remind members that the Government has already legislated for the important right to join a trade union.
On the wider point about our strategy on inward investment, I note that inward investment now accounts for less than 10 per cent of the total programme resources of Scottish Enterprise, totalling £1.3 billion. We no longer try to compete on the basis of low-value products, because we know that that does not bring security to workers.
We cannot shut ourselves off from the rest of the globe. I do not think that anyone suggests that we would not want major facilities that are research and development intensive and offer secure jobs. We want them to come. We no longer go out to attract—nor can we attract—low-value products. We are doing more and more to support the growth of high-tech indigenous companies that are likely to be headquartered in Scotland.
I take on board what the minister said about EU consultation regulations and her view that the position will change. Does she recognise that, at EU level, much tighter rules governing the activities of multinational companies are needed so that those companies can no longer play one country off against another? Such rules are needed for current members of the EU and for potential members—recently, investments have moved from Scotland to Poland, the Czech Republic and elsewhere.
I welcome the fact that, if necessary, £17 million of public money will be earmarked to deal with the aftermath of the closure. Does the minister accept that moral pressure should be put on Motorola to match that funding? Motorola has a moral responsibility to the workers and to society more generally in West Lothian and the rest of the central belt.
I agree that there should be moral pressure in relation to outplacement and helping people to find jobs and to enhancement of the statutory redundancy pay for which workers may be eligible. I also agree that there are products whose manufacture we will increasingly lose to cheap labour locations, but Germany is anything but a cheap labour location.
We have touched on the issue of information and consultation. That was not the issue in this case. It will cost more to get rid of 3,000 workers in Bathgate than it would to get rid of 2,000 workers in Germany. This situation is not about the costs of getting out. The company is saying that it does not think that it can make mobile phones any more and that it will concentrate on its smallest site and try to trade out of losses into profit. The situation has nothing to do with the productivity of the workers. The company is saying, "We have lost half our market share to Nokia and the bottom has fallen out of the market. We will concentrate on one small plant. Okay, it will cost us more to close the Bathgate plant because there are 3,000 workers there, but we are not making it in this market."
We have fought every inch of the way to say that that is a short-term consideration superseding the long-term strategic interests of Motorola. We wanted Motorola to concentrate its European production activities here. The issue of consultation, on which we need movement, has not been the determining factor in this decision.
I apologise to those members whom I have not called, but they are on my list to speak in the debate to which we now turn.