Michelin Factory: Ballymena

Baroness Hoey Excerpts

Tuesday 17th November 2015 Commons Chamber

[Ian Paisley]

That is a very helpful intervention because it allows me to put on the record that the first thing I raised with the employer when the announcement was brought to my attention was, “How are you going to look after the workers that have made you billions of pounds as an international company over the years?” I am pleased that Michelin put into its statement on 3 November a commitment that the support from the factory will include enhanced redundancy payments and a retraining package, as well as the deployment of what is called the Michelin development community fund. I have managed to help to secure an additional £5 million for my constituency, which will allow for the retraining of people and will help them to set up local businesses. That fund has been used over the years to create an additional 400 jobs that are not associated directly with Michelin. I hope that the deployment of that fund over the next 10 years will see job opportunities slowly created for these people, who would otherwise be told that they do not have a job.

It must be stressed that Michelin will make job offers to those who feel able to travel to Dundee or Stoke on the mainland, although those jobs will not be in the manufacturing of large truck tyres, which is what we have done in Ballymena. I imagine that very few people will do that, but at least those job offers will be made.

[Kate Hoey (Vauxhall) (Lab)]

I congratulate my hon. Friend on securing this debate. If this was happening in any constituency on the mainland, it would be a huge story. Can he explain very simply why Michelin has decided to close the factory and move to two other parts of the United Kingdom, rather than to move out of the United Kingdom?

[Ian Paisley]

I thank my hon. Friend, who shares my passion for the North Antrim constituency, given her roots in County Antrim. She will have been contacted by friends and family who have been affected by the closure. I appreciate the support and encouragement she regularly gives me to continue to fight for the interests of my constituents.

Michelin has identified three key reasons why it has to close the factory, and they are sad reasons. As I have said, I am glad that the Minister for Small Business, Industry and Enterprise is here and that the Government see that there is something that they can do for us nationally. The Michelin statement put three key reasons into the public domain.

The first reason was as follows:

“The proposal to run down the truck tyre factory in Ballymena has been made in the light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007”.

That is beyond the control of anyone on these Benches. It is a fact of life that there has been an economic downturn. For 20 years, the factory in Ballymena made truck tyres for the north American market. That market was taken from it through an internal decision by Michelin and those truck tyres have since been made elsewhere in the Michelin portfolio. After losing that market, Ballymena was solely making truck tyres for Europe. The downturn then hit us with a vengeance and we are reaping the consequences. The demand for truck tyres has decreased by more than 5 million tyres a year. That has had a catastrophic effect on the business.

The second reason Michelin put into the public domain was

“the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition.”

Most of those have been made in Korea. The workers in my constituency never feared competition or the need to be competitive. They believed in the quality of their product, which was of award standard. However, when a cheap tyre comes in during an economic downturn, it has a devastating effect on business.

The third reason was that the tyre building machines at Ballymena were not capable of making the new standard of tyres. An investment of at least £50 million was needed to reappoint the factory. The company had to decide whether to make that investment or cut off the Northern Ireland arm and move everything to the mainland. That goes to the heart of the point that my hon. Friend the Member for East Antrim made. Energy costs are so astoundingly high in Northern Ireland that they forced the hand of the company when making that decision. I will come on to energy costs in a moment.

The Member for Vauxhall (Kate Hoey) said that if this had happened in any other part of the United Kingdom, there would be huge interest. I welcome the fact that there are 16 Members in the Chamber for this debate. I salute every one of them for being interested enough to turn up. Usually when we come to the Adjournment debate, apart from my hon. Friend the Member for Strangford (Jim Shannon), no other MP makes a contribution. I know that, at times, the Minister feels as if she is being stalked by the hon. Gentleman. I pay tribute to the fact that there is wide interest in this debate, and I am delighted that the hon. Member for Ealing North (Stephen Pound), who has visited my constituency, is also here.