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“If you join The Visteon UK Pension Plan, then for future service from 1 April 2001, you will receive the same pension benefits as you would have received from your Ford Pension Fund based on the current and future provisions of that scheme.”
Management of the pension fund is causing enormous concern, and I ask the Minister to look at whether the fund has been mismanaged. I understand that the pensions regulator has been contacted and has received information. I appeal to the regulator to investigate the matter fully, and urge the Minister to support any such investigation.
I will give the Minister one example of a complaint submitted. The trustee agreed to transfer the benefits of the members, together with assets totalling over £21 million, on 30 May 2007. That related, I think, to flow-back from Visteon to Ford. Visteon UK Ltd then made a special contribution of more than £7 million to the Visteon UK pension plan, so that in making the transfer it would
“not be reducing the security of the remaining Plan members.”
I have seen complaints about several similar situations whereby very large sums have been transferred from the Visteon pension fund into the Ford pension fund. The trustee of the Visteon pension fund has apparently said that such transfers did not affect the security of the remaining plan members. Why are we now seeing such a deficit in the pension fund, which does affect the security of existing plan members?
My constituents who have worked for Ford and then Visteon are very loyal, very hard-working employees. They wanted to work with management to examine ways of cutting costs in order to increase the sustainability of their company and their employment. There was huge frustration among those who worked at Visteon that they were not able to work better with management to achieve those cost-cutting measures. All that the management would talk about, as I found too when I spoke to them, was staff terms and conditions. They were not talking about the terms and conditions of management, because the information that I have received is that the management got a substantial pay rise while they were trying to cut the terms and conditions of the staff.
My constituents, such as those of my right hon. Friend the Member for Enfield, North, the hon. Member for Castle Point, my hon. Friend the Member for Thurrock and others, have not been shown the same respect and dedication that they showed to their former employers. The Minister will understand my anger, their anger and the anger of the Members who are present about the lack of justice.
I have highlighted a number of issues of concern. The promises made at the time of separation between Ford and Visteon have not been kept. I am talking not about one promise, but about repeated promises made in numerous items of correspondence and in documents. These promises of lifetime protection of terms and conditions, including redundancy, were not kept. There has been a curious deficit in the pension fund, a lack of any real action from the managers of Visteon in respect of the sustainability of the company and a lack of genuine co-operation with the union. The most serious thing is what appears to be the deliberate outsourcing and running down of the company, as highlighted in a secret document dated 21 May 2007 from Belfast. All those issues have to be addressed, and any help that the Minister can give my colleagues and me here tonight will be greatly welcomed in trying to fight this injustice.
6.27 pm
The Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform (Ian Pearson): I congratulate my hon. Friend the Member for Basildon (Angela E. Smith). She has championed the interests of Visteon’s UK workers powerfully over a long time, and I have had many conversations and meetings with her on the subject. I welcome the opportunity to respond to her today on the record. I also welcome the strong interest of a number of hon. Members in the House today who have constituents, be they in Basildon, Enfield or Northern Ireland, who have been affected by this situation.
The circumstances surrounding the closure of the facilities at Basildon, Enfield and Belfast are very sad, and I very much sympathise with the position in which the work force have found themselves. Agencies here and in Northern Ireland have taken steps to put in place a range of support that will help the workers to find other work and training opportunities, and the agencies remain committed to helping those affected. I also note that although today’s debate is focusing on events at Visteon UK’s manufacturing operations, Visteon Corporation’s commitment to Visteon Engineering Services is extant, and it continues to have a UK presence.
Angela E. Smith: Is the Minister aware that there are rumoured plans to move Visteon Engineering Services in Basildon away from the town to another location? That would be a further blow to my constituency from this company.
Ian Pearson: I note what my hon. Friend says, but I do not have any information about those plans and I would not want to speculate on rumours. However, I very much share her concerns, and those of other hon. Members present, about the manner in which this administration has been brought about. Although it is true that the automotive industry globally has been having a tough time, the problems that brought Visteon to its current position are rooted very much in the past: in its break from Ford; in how it has pursued business opportunities, including the outsourcing to eastern Europe and South Africa, which she discussed; and in the manner in which the work force have responded.
Although the warning signs have been apparent for some time, the speed of developments has taken many by surprise, starting with the review announced in January 2009, when Visteon UK management were charged by the parent company to put into place a plan by the end of March 2009 to stem its losses. By any stretch of the imagination, that time scale was very short. No company can maintain constant losses and since its spin-off from Ford in 2000, Visteon in the UK has never been profitable, with losses over the nine years of £800 million. In the same period, Visteon Corporation has invested some £1 billion into the UK business to continue its operations. Worldwide, the corporation lost $663 million in 2008. Visteon has been in a difficult situation, but my hon. Friend rightly points to the very short time frame in which Visteon UK was required to take action if administration were to be avoided.
The review concluded that, without ongoing funding from Visteon Corporation, its UK business activities would not be viable. The ending of funding on 31 March 2009 meant that the company was insolvent and its directors took the decision to put the company into administration immediately.
As my hon. Friend said, meetings have been held between Visteon Corporation and the unions on redundancy packages. One offer was tabled earlier this month and a further improved offer this week. This would be entirely funded by the corporation—beyond the statutory minimum. I understand that the company is keen to ensure speedy payment in recognition of the hardships faced by its ex-employees. Discussions continue with the unions and I hope that they have a positive outcome.
Hon. Members talked about the enforceability of the employment agreement between Visteon and its work
force, and I am sure that the unions will take legal advice on this matter. I am also sure that Visteon will note the point that my hon. Friend makes when she talks about the moral responsibility on it to honour those agreements. That point was also supported by other hon. Members.
The Government have maintained regular contact with the company and we have tried to help where we can. As part of the company review, the Department for Business, Enterprise and Regulatory Reform suggested the involvement of the conciliation service ACAS in discussions on the mirrored—or ex-Ford—terms and conditions. Visteon UK met ACAS in February. However, while the unions were happy for ACAS to be involved in principle, they did not want to discuss terms and conditions with it. ACAS was therefore stood down as no progress was possible.
The Department has remained in close contact over the past four years as Visteon has attempted to put its UK operations on to a sound financial footing. Government in the UK and the Northern Ireland Assembly—and previously the Welsh Assembly Government with regard to the former Swansea plant—have supported the company through regional grants for Belfast, Enfield and Swansea, supply chain activity and training worth more than £1 million. There has also been a range of local support and assistance.
My hon. Friend mentioned pensions and I recognise the strong concerns that former employees of Visteon will have about their pension entitlements. I can assure my hon. Friend that the Pension Protection Fund has been notified and that it is considering the position of the scheme.
Angela E. Smith: Will my hon. Friend press the pensions regulator to investigate this case?
Ian Pearson: I note what my hon. Friend says. One thing that I was going to suggest was that I should meet her to discuss that and other issues to do with the matter.
Clearly, my hon. Friend raised a lot of issues about the company’s strong links with Ford. She will undoubtedly continue to campaign on the issue—and rightly so—and will no doubt keep me updated on her progress. I am happy to discuss with her whether the Government can play a useful role. She mentioned, in particular, involving the pensions regulator. Of course, the administrator will have to produce a report to Government in due course.
6.35 pm
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