Meeting of the Parliament

Meeting date: Tuesday, November 6, 2018

Official Report 1245KB pdf

---

Urgent Question

The next item of business is an urgent question that I was able to select earlier. I am grateful to the Cabinet Secretary for Finance, Economy and Fair Work for returning from Dundee to answer the questions that members wish to put. As a consequence of the urgent question, decision time will be at 5.15.

---

Michelin Factory (Closure)

To ask the Scottish Government what talks it has had with management at the Michelin Tyre plc factory in Dundee, the trade unions and Dundee City Council regarding the future of the plant.

As members might imagine, I have quite a detailed initial answer to that question.

As the Presiding Officer has just said, I have just returned to Parliament from Dundee, where I was joined by my colleague Shona Robison, who is the local MSP. I have had a range of meetings with representatives of the workforce, trade unions and Dundee City Council. The discussions had to be cut short so that I could return to update Parliament today rather than tomorrow, as had been proposed. However, I will continue to engage with all those whom I mentioned and with the United Kingdom Government, as we explore all options for the site.

Michelin’s announcement that it intends to close its plant at Dundee is devastating not just for the people who work at the Michelin plant, but for their families, the whole city of Dundee and the wider area. The message from the Scottish Government is clear: Dundee is a hugely vibrant city and a great place for business to invest, grow and develop, and the Scottish Government will do all that we can to secure a future for the plant and the workforce.

Let me be clear: we will leave no stone unturned in our efforts to keep the plant operational. Our top priority is to pursue options for the site to continue with commercial production. Our thoughts are first and foremost with the 845 workers and their families who could be directly affected, if the plans go ahead, as they go through this period of huge uncertainty. We will work with the unions and the management to provide the best possible support to the workforce at this difficult time. I want to set out to members what action the Government has taken and will take.

The Scottish Government was informed at the end of last week that Michelin proposed to close the Dundee plant. On Thursday 1 November, I met the managing director of the plant, John Reid, and Alexander Law, the public affairs manager of Michelin Dundee. At that meeting, I sought engagement with senior Michelin management to test the status of the decision and to explore how open it would be to alternative proposals.

On Sunday 4 November, the chief executive and the strategy and sectors managing director of Scottish Enterprise and I met members of Michelin’s group executive. They have agreed to consider a proposition that we will bring forward to secure a sustainable future for the plant. I confirm that I will convene an action group to explore all options to develop that proposition and to secure a future for the plant and its highly skilled workforce. I will chair an initial meeting of the group in Dundee next Monday, and the action plan will be taken forward by Steve Dunlop, who is the chief executive of Scottish Enterprise, with the leader of Dundee City Council, John Alexander. Having spoken to the council, the trade unions, local politicians and the UK Government, I am confident that there is a shared desire to work together to secure the best possible future for the site and its workforce.

We are aware that the task is not easy and that significant challenges are to be faced, but the Government is determined to do everything in our power to prevent closure of the plant.

Michelin in Dundee was established well over 40 years ago, in 1972, and has become a key part of the local community. The plant, which is a cutting-edge facility that uses the latest manufacturing techniques, has a highly innovative and talented leadership team and a highly skilled workforce. They have been working hard to deliver significant efficiencies and environmental improvements, and to extend the range of markets that they service.

I know that Michelin has not arrived at the decision lightly. Although the market is clearly difficult for the products that are made at the Dundee plant, I know that the workforce and the unions have gone to immense lengths to make the plant as competitive as possible in order to secure its future.

The influence of Dundee’s excellence in engineering and manufacturing extends well beyond these shores. It is the complementarity and the spirit of collaboration between the private and public sectors that makes it unique. Based on Michelin’s existing strengths and those of the broader manufacturing and engineering sectors, we will work in collaboration with all partners to retain the manufacturing facility in Dundee.

In recent years, Dundee has undergone a major transformation, and it is a great place to do business. The Scottish Government will work with everyone across Dundee in efforts to ensure that there continues to be a vibrant future for manufacturing there.

We have been working with partners to complete the arrangements for the £300 million Tay cities deal, and for an additional £50 million investment package. The Scottish Government stands ready to move forward with the Tay cities deal as soon as possible. We call on the United Kingdom Government to bring forward additional measures and investment in the light of Michelin’s announcement.

I thank the cabinet secretary for his response and for all the work that he has done over the past week. I am sure that it is appreciated by workers and their families in Dundee.

The Labour Party is devastated for the workers and their families throughout the city, who tonight face grave uncertainty about the future of their jobs and their livelihoods. As the cabinet secretary said, Michelin has been in Dundee for 46 years. Its success is due entirely to the dedication of the loyal workforce and the constructive relationship that Unite the union has fostered with management. Consequently, there has been understandable upset at the mismanagement of the closure news which, I am sure, everyone regrets.

I pledge my support and that of my party for the action team that the cabinet secretary plans to set up. Does he agree that the £350 million that has been pledged for the Tay cities deal will now not touch the sides, especially as investments will go to other parts of the region? Can more money be found for Dundee? The Tay cities deal is long promised. Does the cabinet secretary agree that we have not moved fast enough on decommissioning jobs for Dundee, and that we cannot allow any further delay in investment? The Tay cities deal was due to be signed tomorrow. Will he commit to signing it before the end of the month?

I thank Jenny Marra for the tone of her questions and the offer of support from the Labour Party, which I take in the spirit in which it has been offered. A cross-party approach will be very welcome in Dundee. I stand shoulder to shoulder with the trade unions in doing everything that we can to support the workforce at this challenging time, and to find a solution to address the future of the plant.

We are offering immediate support to management to support the workforce. I agree entirely that the trade union has good relations with management; indeed, its working relationship with the company has been held up as an exemplar. That good will is partly why Michelin is willing to listen to me on a proposition. How we have conducted ourselves over the past few days has been positive, too. We will use that good will to try to get the best for the plant.

On communications, I agree that what happened was an appalling way for the workforce to find out about the announcement. The matter could have been better handled. I simply say this: if it was a leak, it was not from the Scottish Government, and I do not believe that it was from Michelin either, which leaves one other substantial party to explain its behaviour.

It is important that we proceed with the Tay cities deal. We do not want economic and industrial benefits to slip away from us through others using the situation as an excuse not to sign up. We should proceed with the deal, but we must give all partners the opportunity to make additional resources available in the light of Michelin’s announcement.

I call on the UK Government to step up to the plate, to allocate additional resources to the cities deal, and to look at the industrial strategy and sector deals in the light of other on-going negotiations in order to ensure that we can deliver for the region.

I have reached out to the UK Government—I had a call with Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, yesterday—and it has pledged to work with us. I will take that forward in the spirit of positive engagement. Next Monday, when the action group is in place, we will have a number of strands of work to take forward.

In relation to other industrial interventions, we will have opportunities to work on other areas, including decommissioning. The Chancellor of the Exchequer has issued a call for evidence on the prospects for decommissioning work. We will work on all that, but our primary objective right now is to protect the workforce and to save the plant.

I welcome and agree with the cabinet secretary’s initial response—that the plan is to support the workforce and the plant. I also welcome his latter comments on options for the future, because we know from experience that the ambition that we have at the start sets the path for recovery and for what will come out of the process.

Whatever the outcome for the plant and the workers, I do not think that the cabinet secretary would deny that, today especially, we need a laser-like focus on industry in Dundee. The cabinet secretary knows as well as I do that the unemployment figures for the city do not reflect the real joblessness there. That laser-like focus is absolutely necessary, given the news today, the challenges and the delay on decommissioning, and the unemployment figures in our city, which, in UK terms, are terrible and need to be addressed. Will he back an independently chaired task force on industry in Dundee?

I will be helpful to Jenny Marra. The trade unions have asked me not to set up a separate task force. They have welcomed the decision about the action group, and the language that has been used around that is significant. There is a distinction to be made. I hope to continue the partnership that we have established today with the trade unions, which are content to be involved with the action group that I am establishing. I do not want an independent piece of work. There are opportunities to look at the wider industrial strategy for Dundee, but the “laser-like focus” is now on the art of the possible for the 850 jobs there. We will be absolutely focused on that, and we will align our enterprise agencies and all parts of government to support that proposition.

For the avoidance of doubt, as a Government, we will consider all calls for additional resources in support of Dundee and the strategy for Michelin. I ask that the UK Government match that commitment and step up to the plate on the additional resources that might be required to assist Dundee at this time, thereby recognising that although Dundee is the epicentre, the issue goes wider than the city and extends to the whole of Scotland and the region.

We will calibrate all our efforts around industrial strategy, innovation, engineering, national manufacturing institutes and so on in order to give Dundee a fighting chance to save the plant. It is important that we showcase the positives of Dundee because that will keep Michelin interested in a future at the plant.

I assure Jenny Marra that I will do absolutely everything that I can—the Government, which is absolutely united on this, will do everything that we can—to focus on a solution that gives Dundee a fighting chance, while exploring the wider industrial and employment issues in relation to the city and the wider region.

Five members have indicated that they wish to ask a question.

The news has clearly been devastating for the workforce and the city in general, but does the cabinet secretary share my admiration for the workforce at Michelin, whose tenacity, flexibility and determination despite this challenge was so clearly demonstrated at the meetings that we held with them earlier today?

Further, does he agree that what matters now is a focus and action on Michelin? Can he tell me when he next expects to meet the Michelin senior management team? What does he hope and expect to have received at that point from the action group that he has announced today, which has been very much welcomed by the workforce, to be able to put to Michelin at that meeting?

Finally, will he confirm again how important it is for all parties, including the UK Government, to come forward with packages of support for Michelin, whether that is through the Tay cities deal, the industrial strategy or any other route? What matters is specific packages of support for Michelin, the plant and the workforce.

I hope that he was left, as I am sure he was, with a clear impression from the workforce that it has been through ups and downs in the city over many years and that, despite the current challenge, their determination and effort is an example to us all. We should get behind them but also, importantly, follow their lead in what they are asking us to do.

Shona Robison is absolutely right. Even though the workforce and the shop stewards are absolutely devastated at the news, they have a resolve to take forward to management a proposition that will allow the plant to continue, and we will assist in every way that we can with our efforts on the economic interventions that we may be able to make, our partnership with the local authority on non-domestic rates and our partnership with the UK Government on the industrial strategy and the city deal. We can unite, and now is the time to unite and work in partnership with everyone who is interested in order to give the plant in Dundee a future.

For us, that is about retention first and foremost and repurposing, if that can be achieved in partnership with the staff, who are absolutely up for the task that is before us. That is why the constructive and positive debate and discourse during today is so helpful. I also note again that, in the spirit of partnership, Greg Clark, the UK Secretary of State for Business, Energy and Industrial Strategy, has made the offer that his officials and junior ministers will be supportive. I hope that that will allow a really constructive dialogue on the actions and interventions that will lead to meaningful input by way of the UK Government.

We are all up for this and we need to work together in partnership to put the best possible proposition to management. The timescale for that at the moment is that management will meet me in the next few weeks. Of course, I will have to respect the confidence of that meeting, but I think it is really significant that management is willing to hear from us and hear our proposition. What we need to do now is to unite to put the best possible proposition to Michelin in the way that Shona Robison has articulated, and then take the matter forward in the best way that we can to retain as many of the jobs as we can in Dundee.

There are six more members who wish to ask a question.

I echo the comments of Jenny Marra, Shona Robison and the cabinet secretary. Our thoughts are with the workforce, their families and their communities, and we will work with whoever is involved to try to find a solution.

I have a couple of questions for the cabinet secretary. First, given that the number of redundancies is potentially large, will he make sure that the Scottish Government agencies that will be involved have the resources that they need to do the work? Secondly, I note that the cabinet secretary spoke to Michelin management. Was that the group management that made the decision to close the factory and would have the authority to amend it? What did he say to them?

Bill Bowman asked me to press on all those who are involved to come forward and help. I gently remind the Conservatives that the UK Government is involved, and any pressure that Conservative members can apply to the UK Government will be welcome.

Do Scottish Enterprise, Skills Development Scotland and partnership action for continuing employment have the necessary resources to help? Yes—they do. However, let me be clear that, before we even come to mitigation, we have a greater objective, which is retention and saving the plant.

I have instructed the chief executive of Scottish Enterprise to do everything possible and explore every avenue to give the plant a future. Scottish Enterprise can look at our strategies, including the economic action plan, the industrial strategy and the internationalisation strategy, and pull all that together with the business directorate. With everyone else, including the local authority, the local business community and the UK Government, we will pull together with the workforce to provide the resources to put the best possible case to Michelin, while recognising that the rationale for the decision includes issues such as Asian imports coming into the market and the cost of production. It will take a monumental effort to get the outcome that we want, but we will make that effort.

As for the group executives, I have met senior decision makers. The decision was taken well in advance of last Wednesday, when the Scottish Government first heard about it—as soon as we heard, we asked to meet the local management and then to meet the company executives. I fully expect the people I meet in a few weeks’ time to be the decision makers who have the authority to look again at the circumstances and see whether we can work together to pull something from the situation.

The most pressing point is that we will have a window of opportunity in which to act. I have resolved that the Scottish Government will be committed to doing everything that we can, and I need equal support from the UK Government, so that we can put the best possible offer to Michelin international.

The intelligence that has been passed to me is that the company has never before in such circumstances had such a positive and constructive engagement with a Government. That gives us a bit of good will and flexibility to get the best possible outcome for the workforce in Dundee, and I will not squander that opportunity.

The Parliament should be united in its concern for the workers who are directly affected and their families and in its support of the action group that the Scottish Government has established. However, we should also be mindful that, when particular sectors or large employers face changing circumstances that threaten their viability, a proactive approach is always preferable to a reactive setting-up of task forces and action groups, which we often hear about.

If additional funds are found for the Tay cities deal by one Government or preferably both Governments, what extra measures will be put in place to ensure that the outcome is the most sustainable possible economic activity? That would avoid what I hope we all want to avoid—the risk of being back here to bemoan something that was here today and gone tomorrow.

I am sure that Patrick Harvie is aware that we were investing in the plant, that Scottish Enterprise was engaged and that there had been leadership, environmental support and transformation of the plant—so much so that it was to be the first Michelin site to achieve carbon neutrality, which we all welcome. That is why there is some hope in the Dundee site’s environmental credentials.

We had engaged on innovation and interventions to give the plant a future. We thought that the plant had a future, because the most recent briefings that we had suggested that that was the case with the necessary transformation in place. Where we can, we will continue to work on innovation to ensure that the plant has the best possible chance of success through technologies, design and research and development for the future, from which manufacturing benefits will come along.

We are of course looking at the Tay cities deal, but it is important to allow that to progress, because other economic interventions are contingent on it. We give the UK Government the opportunity to come to the table and provide at least match funding for the contribution that we have put on the table for the deal.

I spoke about the environmental credentials of the plant, which was heading for carbon neutrality. There is scope for further environmental enhancements. We have worked with the site and we will continue to be proactive as we take forward our ambition to save the plant.

The Liberal Democrats support the cabinet secretary’s efforts over the past few days to find a solution, which I am sure everybody who is involved will appreciate. Has any part of the private sector expressed interest in the Michelin plant? What can Skills Development Scotland do to assist with any retraining for the workforce that is required to meet the industry’s challenges more effectively?

Again, I offer my appreciation for the support from the Liberal Democrats. That is important. With regard to some of those specific issues, there would be arrangements in place for mitigation, PACE and support for the staff. The company is committed to a retraining programme, but before we get to that, we must be laser-focused on trying to save the plant, save the jobs and see what can be done around that proposition, so that we do not have to look at other issues. I understand the reason for moving into that territory, and that will be done, but the mission for today, this week and the short term is to save the plant.

This is not about a skills shortage. This is about the Asian imports, supply, and the product at Dundee; therefore, we need solutions that are appropriate to the challenges that we face. Of course, if required, the Scottish Government will stand ready to support the staff in the next phase, but alongside everyone in Dundee, we are united right now in the mission to save the plant, or as much of the plant as we can possibly save. We will return to those matters as and when required.

Will the Scottish Government commit to publishing all information about any funding that Michelin has received from Scottish Enterprise or any other Scottish Government bodies?

I will publish any information that it is appropriate to publish. If this debate is going into the territory of the clawback of Government grants, that is a fair question to ask. Of course, the Scottish Enterprise grant clawback conditions will be fulfilled, but the objective is not to scrape back a few million pounds from Government grants; it is to save 850 jobs. That is our priority and our mission. I will make sure that there is due diligence and compliance around any Government grants, but right now the mission surely has to be save the plant, save the jobs and give Michelin a future in Dundee. It is on that mission that I am 100 per cent focused.

I refer members to my entry in the register of members’ interests. I welcome the cabinet secretary’s actions to save the factory and these workers’ jobs. It is important that we all work together constructively. Has the cabinet secretary examined or will he examine ways in which, as part of a wider Scottish industrial strategy, Scottish Government public procurement can be utilised to generate work to sustain these present and future high-quality jobs in Dundee?

In essence, yes, I am actively looking at our whole procurement approach. I was looking at it before I knew of the announcement, so yes is the answer to Mr Leonard’s question. I am not sure that, in isolation, procurement is the answer to the wider challenges that the plant faces. We will get on with everything that I have said today and anything else that we can do. I received a very helpful letter from Richard Leonard in relation to some of the other suggestions and I agree with much of it. Although I do not think that it is a panacea, the Scottish Government is, in any event, looking at procurement.

I associate myself with the concerns for the workers at the Michelin plant and their families that have been raised by other members. I also acknowledge the work of the cabinet secretary in the area. What assurances will the cabinet secretary seek from the management of Michelin to use their best endeavours to save the plant in Dundee and as many jobs as possible?

I will say something about the local plant manager, John Reid. From the strength of support that I witnessed today from his fellow workers and the trade union shop stewards, and the respect with which he is regarded by the management at Michelin, it is clear that he is something of a local legend who has saved the plant in the past. I will work closely with him and all other parties to try to save the plant. We are working as hard as we possibly can and it will require a partnership between the workforce, the management, the council, the enterprise agency and, hopefully, the UK Government to get the outcome that we all wish to see.