Examination of Witnesses (Questions 400
- 418)
THURSDAY 11 JANUARY 2001
MR TONY
WOODLEY, MR
JOHN JACK,
MR MICHAEL
LONGLEY, MR
DUNCAN SIMPSON,
MR SIMON
MONKS AND
MR TERRY
PYE
Ms Perham
400. Mr Longley referred to the conditions for
redundancy, so presumably that has not been discussed, or are
you thinking it will be the ones in the agreement—the so-called
agreement—with you and Vauxhall? Were redundancy terms mentioned
in the agreement in 1998?
(Mr Woodley) As far as we are concerned you would
expect us to say that we do not accept the decision and our general
secretaries are having meetings on Monday of next week and no
doubt thereafter will go to Detroit to try and influence this
decision. So we are not accepting the plant closure, so sitting
here today there are no enforced redundancies or redundancies
of any type hopefully going to take place. The agreement we have
means there should not be any enforced redundancies, and certainly
our thoughts in trying to limit the damage from this disaster
will be to try and make sure this plant maintains its vehicle
production, to try and make sure that the new Vectra does go into
this plant as opposed to another plant in Europe going to three
shifts within two years, but also it does make business logic
that some employees will move through the wall, as we say, into
IBC where they need labour immediately. That is a better overall
financial position for everybody than that which is presently
on the table. We certainly do not intend to see our people, our
plant, our community, treated as mugs.
401. We did cover that with Mr Reilly and his
colleague. With the Luton Vauxhall Partnership being set up on
the 13th, the day after, and our understanding is that 70 per
cent of the Luton assembly plant employees live in Luton itself,
what expectations have you got for the working of the Partnership,
or is that a step you do not really want to think about before
you can try and save the plant?
(Mr Woodley) You would have to be insane not to accept
that in really difficult circumstances like these any task forces,
any partnerships, which can lead to re-training for jobs would
be welcome, but nothing could compensate obviously for the loss
of this massive manufacturing site with its knock-on effects in
components and the rest of the economy. That is why we believe
we have to convince this company it is not in their interests,
because we believe consumers will react, it could very well be
nobody wants to work because people have worked so hard in recent
years to make sure this company has a profit year on year, but
at the end of the day what do we do? Do we sit back and do nothing
and allow our agreements to be broken, our country to be treated
poorly, or do we turn round and do something? Therefore we have
no choice, we have to try and work with this company now to try
and minimise their losses which are clearly there in Europe at
the moment, although not in Britain. Let's try and help by some
employees going through into IBC, but let's make sure that the
fabric of this plant is maintained with the agreement that Epsilon
should come into Luton. That is the best thing we can do, rather
than worry ourselves about redundancies which we are not going
to accept.
(Mr Pye) Of course these are all measures we would
have done if we had had proper consultation right from the start.
We are doing it now against the back cloth that the company has
made this decision. If we had been consulted as we were two weeks
before the events about the difficulties, we would have been engaged
in a dialogue to resolve those difficulties.
402. You said at the beginning, Mr Woodley,
that you were given to understand by Mr Reilly several weeks before
there was a problem that he had fought that off?
(Mr Woodley) That is right.
403. So your next step is to go to Detroit and
follow the legal action path?
(Mr Woodley) As you know, there are many meetings
and of course there is to be a town rally in Luton. Our task is
to galvanise political and public and industrial support to pressurise
General Motors into honouring their agreement. We think it makes
good business logic and economic sense for them and some of our
arguments cannot be refuted. I keep going back to this over-capacity,
it is not about bad workers, bad quality, about profit, what is
all this about? It is not about over-capacity, it is not. For
the record again, if we talk about capacity utilisation across
all the European plants, the total capacity utilisation for General
Motors for all plants is 74 per cent, that is incredibly high.
To put it into perspective, Ford's capacity utilisation across
Europe is 60 per cent. Fiat's capacity utilisation is 54 per cent.
This is what we are dealing with here. I am repeating myself here
but they have a need to reduce capacity in the short-term, reduce
losses in the short-term, but somebody is going to benefit from
the Luton closure in 2? years and our task is to make sure that
benefit and that agreement leaves jobs in this country, because
that is the agreement.
Mr Butterfill
404. There are a lot of similarities here it
seems to me between the pre-emptory decision BMW made over Rover
and that announcement and the behaviour by General Motors where
they made a sudden announcement which nobody apparently expected.
Would you agree with that?
(Mr Woodley) I would agree the decision was sudden,
but I think the needs were completely different.
405. The other parallel is this, BMW said, "Well,
Stephen Byers ought to have known, we were telling him for ages
beforehand, we were flagging up we were in trouble, there were
things he could and should have done before hand but he said no
he could not." Is it not the same situation here? The DTI
knew at least a month beforehand there was real trouble and serious
decisions were going to be made by the company and yet, as far
as I can see, no proposals were being actively put forward by
the DTI, or did they come to you and say, "Is there anything
we can do? What can we do together to stop an adverse decision
being made by the GM board?"
(Mr Woodley) I think this is the same question which
was asked earlier, Chairman. I am not a politician, I am a trade
union leader and I think it would be inappropriate for anyone
to make politics. This Government, with respect, is not to blame.
We have General Motors who are breaking the agreement. If I may
say this, I am disappointed that not one single MP—other
than the two local MPs possibly—senior MPs, ministers, of
any party, of any party—
406. You are seeing them today.
(Mr Woodley)—is condemning what General Motors
has done. They have broken European law, they have broken their
agreement with British workers, having taken British taxpayers'
money. So, with respect, do you not think it is time that everyone
joined together and said, "This just is not good enough."
That is what I believe as a trade union person.
407. We also have a situation where we seem
to be in a situation where the DTI is always finding out about
these things at the last minute, even though it is suggested by
the companies they were given lots of warnings.
(Mr Woodley) I have no comment to make.
408. Can I turn to the Frontera and the Vivaro
proposals? How much confidence do you have in the company's plans
for Frontera production continuing and for the long-term prospects
for the Vivaro?
(Mr Woodley) What we are dealing with here is very
clear. The Frontera has a life span of about 3 years, they are
going to cap the production of that vehicle to a maximum of 40,000
units, and they are presently selling 25,000, therefore irrespective
of how many people will work on that vehicle, these are short-term
jobs. 500 jobs, irrespective of today, will eventually disappear.
There are no plans by General Motors at the moment to replace
that vehicle, wherever it is built. With regard to the possibility
and problems for the other plants, our people at IBC and all of
us, but particularly the people at IBC, worked hard for that Renault
joint venture to be the only plant in Europe building those vehicles.
Unfortunately, late on, they lost that battle. Therefore there
is a second Renault plant in Europe which not only will build
their vehicles but will build all of the derivatives for that
particular van.
409. You will not be building the high-sided
van, for example?
(Mr Woodley) Correct. So that is not good news but
my concern and why we must continue to win this battle with General
Motors is this, two years ago Mr Reilly came to us and said, "We
have a problem at Luton, we need Ellesmere Port's help."
We bought into that, not because we are naive or wanted to keel
over and have our bellies tickled, we bought it because we accepted
his argument. His argument was that if Luton goes down, there
will be what he described as a halo effect, a domino effect, on
Ellesmere Port, because the overall costs of running this giant
company would be out of kilter and therefore there would be a
threat to the other plant. I truthfully believe that in the medium
to long-term if Luton is allowed to close, that could be a big
problem for our country and for our second plant. I also believe
that that Renault plant, which literally sits alongside Luton—it
used to be the Luton van plant and it is all one plant really—if
Luton itself closes, it must affect everyone and everything, surely.
So we are very, very concerned. It is not just a Luton problem,
it is a Vauxhall worker problem in Britain.
410. n terms of those of your members who transfer
to IBC, and there will be a reasonable number who do that, one
hopes, are their terms and conditions going to be as good?
(Mr Woodley) The terms and conditions vary. Some things
are good, some things are not quite so good. It is just a pity
really that General Motors, which of course wholly own IBC, did
not re-integrate this company back into the family some years
ago. What they did was they left it standing alone because of
helpful tax burdens—I am not sure that is the right word—from
the past; they could claim tax on it. If they had not done that,
we would not be having this discussion, they would have just transferred
people through from one plant to another with the minimum of consultation.
411. It is strange you have two plants on
the same site owned by the same company with different terms and
conditions.
(Mr Woodley) There is a history with respect to that.
That was an Isuzu Bedford plant, a joint venture, with a Japanese
company, about a decade and a half ago. That is the reason for
that.
Chairman
412. Just to clarify one point. There was a
meeting which you held with Mr Reilly four weeks before the announcement,
and at that meeting am I right in saying he said to you, "A
deal has been done, there are going to have to be savings but
Luton has been saved"? Is that correct?
(Mr Simpson) That was on 2nd November and that is
when he told us of the 180 million dollar loss and also he did
say that the strength of the pound against the euro had put the
focus once again on the UK operations. That is why some people—the
hawks, as Mr Woodley referred to them—were talking about
closing one of our plants. One of the arguments he told us he
had used in response to the currency argument was that it was
his opinion that in the next 12 to 18 months the euro would strengthen
and that would obviously be helpful to us. He did go on to say
that by adjusting production lines, by the utilisation of the
4 to 500 people required at IBC—and indeed at one juncture
he spoke about the possibility of people being transferred from
Ellesmere Port down to the Luton site—by a combination of
those things, he did say he had staved off the attempts and moves
by some people on the board to close one of the plants. We reported
that back in good faith and indeed our local committees were given
the same information, again by Mr Reilly.
(Mr Woodley) There was a caveat, there was always
a caveat. "That is what we believe we can achieve, but if
Detroit over-ruled people, it is out of our hands."
413. The implication is that perhaps Mr Reilly
was telling the Department of Trade & Industry something different
from what he was telling you over that four week period between
early November and the 8th December when the final decision was
taken, that somehow the Government had known about it over that
period in the context of conversations which seem to occur between
the DTI or whoever and GM in the UK. I am trying to establish
that in your view, you were told one thing in early November,
you were tragically told something in very unfortunate circumstances
in early December, but in the intervening period there is nothing
to suggest Mr Reilly had any alternative information which he
was sharing with the Department of Trade & Industry. Is that
correct?
(Mr Simpson) I did ask the question at a subsequent
meeting with the general secretaries in attendance, "Is it
a double-back somersault by the European board, or has the matter
been taken out of your hands? Was the decision made in Detroit?"
His answer was it was a decision made by the European board. We
suspect the other.
414. You said the "general secretaries"—?
(Mr Simpson) Our general secretaries were in attendance
at the meeting when I asked him the question, "Was it a double-back
somersault by the GM European board or was the decision taken
out of their hands?", because it was such a contradiction
to what we had been told four weeks earlier. That is why it came
completely out of the blue, completely unexpected. I asked him
the question, "Was it a double-back somersault and why, or
was it a decision made elsewhere?" The response I got was
that the decision was made by the European board.
(Mr Pye) The things Mr Reilly was telling us four
weeks prior to dropping the bombshell, he was also telling the
DTI. Certainly I listened very carefully when Mr Reilly was giving
his evidence and if you look back, he actually confirms his evidence.
Chairman: I just wanted to clarify that because
there seemed to be a misunderstanding on this side of the table.
Mr Hoyle
415. Following the disgraceful way that the
workers in Luton have been treated, what faith do you think your
colleagues in Ellesmere Port should have in the successor for
the Astra being assembled there?
(Mr Woodley) Ironically that is my old plant. I was
20 years there. I have the same view of Ellesmere Port as I have
for Luton, for Dagenham, for Halewood and indeed for Longbridge.
The labour laws are poor, globalisation has affected us that severely
that governments of any country cannot come to grips with the
problems of it, and the only way in which Ellesmere Port or indeed
Luton can guarantee agreements are made and honoured is for them
to be able to affect the company in such a way that they will
not want to break those agreements. I am sorry to have to say
it but the reality of life is that these companies at the moment
are ignoring governments, they are ignoring labour, they are ignoring
their commitments, and their only goal appears to be shareholder
value while the stakeholders pay the price. It is not good enough.
416. Is there any credibility in the word of
GM Management any more?
(Mr Woodley)When we reverse the decision, I hope the
answer is yes.
Mr Hoyle: I will leave it at that, Chairman.
Chairman
417. On that note, I thank you for your forbearance
and also thank you for your frankness in both sessions we have
had today, gentlemen. As always, if there is additional information
we require, we know where to come to get it.
(Mr Woodley) Chairman, we have a package of agreements,
some of which you have got, but I did pass you a letter from my
general secretary today
418. We have looked at it and the letter will
be put in the evidence. We will consider what action to take once
we have had an opportunity to discuss it. I was not sure if the
general secretary's letter was for publication at this meeting.
(Mr Woodley) It is.
Chairman: We have raised the issue with Mr Reilly,
you probably heard me raising it in the conversations we had with
him, but I will discuss with my colleagues what course of action
we will take on the letter. It may well be that we will decide
to send some questions to the Detroit people to secure responses
from them. Whether or not they will be asked to appear before
us is a different matter and there are practicalities involved
in that which, frankly, at this stage I have to share with my
colleagues. I have had the letter, it will be included along with
what we have received today in the evidence we put in. Whether
or not we will act upon the suggestion, remains to be seen at
this stage. Thank you very much.
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