Ford and Visteon UK Ltd

Geraint Davies Excerpts

Thursday 12th December 2013 Commons Chamber

[Dr Hywel Francis (Aberavon) (Lab)]

I am pleased to take part in this critical debate, because the Visteon plant in south Wales is located in my constituency, and I do so on behalf of many of my constituents, many of whom have travelled to London today from Wales. I begin by paying tribute to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) for securing this debate. As the chair of our all-party parliamentary group on Visteon pensioners, he is leading in Parliament the campaign to get justice for Ford and Visteon UK pensioners. I also pay tribute to my neighbouring MPs, my hon. Friends the Members for Swansea East (Mrs James) and for Swansea West (Geraint Davies), who have done sterling work over many years on behalf of their constituents employed in the local Visteon plant. My hon. Friend the Member for Swansea East sends her good wishes for today’s debate. She is at home, convalescing after an operation, and I am sure everyone here will join me in sending our best wishes for a speedy recovery.

I want to place on record our thanks to the Visteon pensioners action group and the trade unions for their diligent campaigning over many years. I particularly thank Rob Williams of Unite, who was originally from the village of Glyncorrwg in my constituency. His grandfather, the late Glyn Williams, a distinguished president of the South Wales miners union, would have been very proud of him and the campaigning he is undertaking on behalf of his colleagues.

The case for justice for Visteon/Ford pensioners has already been made—and comprehensively so—by the hon. Member for South Basildon and East Thurrock, so I shall not repeat the unanswerable case that he made, other than fully to endorse what he said. What I would like to do today is to emphasise, as he did, the duty of care in the context of corporate social responsibility that Ford motor company needs to discharge to its former employees and their families.

I received this simple, yet poignant message yesterday from one of my constituents, Carl Kirby of Cwmafan:

“We hold meetings once a month and over the last year we have held a minute’s silence at nearly all for workmates that have passed on. This leaves their widows with a lower income, and I know a few have had to seek work to make ends meet. These men are not here to support their families now and their voices should still be heard.”

That is why we are here today—to articulate these concerns on their behalf.

Ford came to our locality in 1964—on to the site on the edge of Swansea that was previously occupied by the Prestcold refrigeration plant and that covered an area of 2 million square feet. It spent £20 million developing and expanding the plant to make it one of the largest and most modern car component factories in the whole of Europe. It grew rapidly from 2,000 employees in 1968 to 6,500 just over a decade later in 1980. Ford was therefore a major contributor to the Welsh economy, drawing its work force not just from Swansea, but from a wide area, encompassing neighbouring towns and villages across the whole of south-west Wales, often taking on the highly skilled labour that was leaving the declining coal mining industry.

Ford’s growth paralleled that of its neighbour, BP, in the petrochemical industry, with its nearby plants at Llandarcy and Baglan Bay. Their parallel growth in the same period was followed by a parallel decline of both companies in the region. There, sadly, the similarity ends. While the closure of BP’s local plants was undertaken in an orderly way, the opposite was the case with Ford. BP followed a clear exit strategy, engaging local stakeholders, developing a range of local legacies and ensuring proper pension rights. It developed a widely admired “Aiming for a College Education” strategy with local schools, helped to sustain and improve local sports and leisure facilities, helped to develop Coed Darcy, a new village in my constituency, and, most striking of all, contributed to the establishment of an impressive science and innovation campus at Swansea university that is to be opened in 2015 on the sea front—ironically, directly opposite the old Ford/Visteon plant.

We are speaking here of two world-class global companies: the one discharging its duty of care in an ethical way to its local employees and local communities, a model of corporate social responsibility over a long period; the other, sadly, retreating almost under cover of darkness, leaving employees, their families and their communities, desolate and in despair. It is not too late, however; Ford can redeem itself.

[Geraint Davies (Swansea West) (Lab/Co-op)]

In the light of what my hon. Friend has said about the contrast between Ford and BP, does he think that viewers of this debate and those who read about it in the United States will be surprised, given what they are likely to think about BP after the oil spillage? In this case, it appears that BP does its best to do its best for its workers, whereas Ford clearly has not.

[Dr Francis]

My hon. Friend has made a powerful point, and I agree with him.

On behalf of all my constituents—those who are directly affected and those who are not—I urge Ford, at this late hour, to discharge its duty of care to all Ford and Visteon pensioners throughout the United Kingdom by giving them their full pension rights before any more retired employees depart this world without receiving what is theirs as of right.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

I come to this debate with mixed feelings. I feel grateful to you, Madam Deputy Speaker, and to Mr Speaker for allowing us to have this great debate in the mother of all Parliaments, from where it will be transmitted across the pond to the United States, where Ford’s ears will be pricking up, as will the ears of Ford’s consumers, who will be thinking twice about whether the Ford brand is whiter than white when they choose their next car.

I am grateful to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) and others for the work they have done with me to keep this show on the road and to keep up the pressure on Ford. Ford might have thought that, after the early rumbles of protest, the noise would die down to a whisper. Instead, we are turning up the volume, and the lion’s roar from Britain will be heard in the United States today and in the future.

I am also grateful to the Visteon workers who are with us today, up in the Gallery, and to the many others who have come here on coaches at other times and who continue their fight in London, Cardiff, Essex, Liverpool and Northern Ireland. They continue to demand justice in all corners of the United Kingdom, and that demand is echoed today in all corners of this great Chamber by all the parties.

I come here with sadness as well. My hon. Friend the Member for Aberavon (Dr Francis) mentioned the fact that Ford came to south Wales in 1964. At the time, my father was heading up economic development in the Welsh Office, and he was critical in bringing Ford to south Wales. He is no longer with us, but I remember his story about the chairman of Ford turning up at the Welsh Office in Cardiff in a green Rolls-Royce—believe it or not—to talk about the arrangements and inducements to get Ford to the area. That was more than 30 years ago, and perhaps Ford had a different outlook and a focus on wider communitarian values in those days.

So I come to the debate with thanks and with sadness, and also with a degree of frustration and anger that we find ourselves here. We have been engaging with Ford UK, and it has been forthcoming in engaging in dialogue, but its hard-nosed American bosses, sitting in their directors’ boardroom, seem to think that this issue will just go away and that the workers of the UK can be treated as some kind of offshore group of people that they can forget about. It has been mentioned that many of the people who have suffered are now dead, and I believe that Ford is hoping that the issue will go away. I and other Members from all parties say this: “Ford, you can run but you can’t hide from your responsibilities. We will continue to fight for our constituents, year after year, until this matter is resolved.” Madam Deputy Speaker, you mentioned that this matter was before the courts and that decisions have yet to be made, but we are talking not about the legalities of the case but about moral responsibility and the duty of care that should be shown by this multinational towards its employees, in respect of pensions in particular.

Members will know that I introduced the Multinational Motor Manufacturing Companies (Duty of Care to Former Employees) Bill, which covers this ground, but the Minister might also wish to comment on the big conversation that is taking place between the global multinationals, sovereign states, workers and consumers. There have been debates in this House about the responsibility of multinationals, be it Amazon, Google or Vodafone, to pay their fair share of tax. Vodafone had the biggest share transaction in history, or at least this century, involving £53 billion, but not a penny was paid in corporation tax. How are we going to re-orchestrate things with other countries to ensure that global corporations are not globe-trotting away from their responsibility?

That is a bigger conversation, and I know that people are engaged on the tax side of it, but its other side is the fair treatment of workers. We have heard reports, for instance on “Panorama”, of what Amazon is doing, and I am following through on that, as it is a local company in my constituency, too. As with Ford, we are talking about big companies that provide big employment and are crucial to all our towns and cities, but that does not mean they can run away from their responsibilities on fair tax, fair play and the fair treatment of consumers and workers, be they current, previous or future.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) on bringing the matter to the House for consideration. I have been told by one Belfast worker that the workers

“rights were guaranteed not for the lifetime of the Belfast plant, but for the working lifetime of the individual workers. Therefore, their redundancy rights were guaranteed for as long as the workers remained employed, and their pension rights were guaranteed until they reached retirement age”

and beyond. We can understand the anger of those workers and their disbelief and dismay at what took place. Is it not time that the big company in America stepped up to the mark and paid out?

[Geraint Davies]

The hon. Gentleman makes his point with typical focus and strength. The Belfast workers will be looking at today’s debate and asking how Ford will respond. The Ford directors cannot sit around with their hands covering their eyes, ears and mouths, pretending that this will go away. They may think it can be kicked into the long grass of the lawyers, where there is an army supported by a huge ammunition dump of money to keep it there, but their business ultimately depends on the good will of consumers.

This is not just about Ford manufacturing innovative, efficient and modern cars; it is about the brand being one that people can be proud of. It is about not hiding behind the brand name a predisposition towards running away from responsibilities to people who have spent a working lifetime, in good faith, making quality cars for people to buy, for a business that is viable. It is simply not acceptable for the people to whom those workers have expressed such loyalty to walk away and leave them near destitute. We will not accept it in our House, our community or across our shores. I believe that the ethics of American consumers and American workers, both in Ford and beyond, mean that they will share our sentiments that we are in it together, to use those immortal words, in terms of our future and how this works. People may increasingly make consumer choices for ethical reasons—various brands have ethical dimensions and do the right thing—and this could be one of those instances.

I am not going to dwell on the details of the case. I simply say that it appears, on the face of things, that various undertakings were given to Ford workers which, as has been pointed out, any lay person would interpret as cast-iron guarantees, whatever the legal beagles might construe, with massive expense, could conceivably have been meant. Almost everybody took those assurances as being cast-iron guarantees.

The Ford pension fund was initially set up £49 million light and by the end of the period of Visteon’s existence—the nine or 10 years in which it continued, when, as has been said, it lost nearly $1 billion and did not turn a profit—that pension fund had become underfunded by some £350 million. The knock-on effect for the more than 3,000 workers who have been affected is a savage cut in the future incomes they can expect into their retirement and their capability to sustain a future of dignity and enjoyment in older age that they deserve.

It has been pointed out that Ford was, in essence, manipulating the profit and loss account of Visteon. On the input side, it was able to demand a certain input of raw materials at specific prices that may have been above the market price, so the input cost was up. On the output side, 90% of Visteon’s sales were set by Ford, which consistently reduced the prices that it was given to squeeze the profit of Visteon, so it was no surprise that it was making a loss and that that loss was manifested in the pension fund.

Interestingly and coincidentally, if we look at figures for 2005-06, Visteon Europe lost £700 million and Ford Europe made £700 million in profit. The point I am trying to make is that their accountancy animal was woven together—that £700 million could have gone either way. In essence, Ford chose the loss to fall on Visteon and on the workers who had nobly and loyally served it for so many years.

I know that a number of Members want to speak so I will not go on. In the evidence we took in the all-party group, and before that, we heard stories of representatives from Ford who, after sitting on the board of Visteon pension fund trustees and then having a vested interest in the closure of the plant, transferred their own pension out of the Visteon pension fund into a specially created fund—another Visteon pension fund, the engineering scheme. Clearly, they had a different and conflicting interest. We asked Phil Woodward, who was a director of the trustees, to give evidence to the all-party group, but what do Members think happened? He did not turn up. What does that say about this whole saga? The more we scratch the surface of this story, the worse it gets.

[James Duddridge (Rochford and Southend East) (Con)]

I find it fascinating that people did not turn up to give evidence. If there were a Select Committee inquiry, could we not ultimately bring in those whom we want to give evidence from wherever they are, including the current Ford executives? Could they not be forced to come here in the same way that Rupert Murdoch was?

[Geraint Davies]

Yes, with pie on their faces! On a serious note, I completely agree with the hon. Gentleman. That point has been made in the all-party group, and we have been trying to get a Select Committee to take on this matter. Possible options included the Welsh Affairs Committee and the Business, Innovation and Skills Committee. When we took it to the Welsh Affairs Committee, there were concerns that the matter was sub judice. However, Mr Speaker has now ruled that the matter has been trundling on for far too long. We are four years into the campaign and there will be another year at least before there is a court hearing. Clearly, we cannot wait for ever, and there is a role for this Parliament to express itself and to ask questions about what has gone on and the duty of care.

What I say in response to the hon. Gentleman’s excellent question is that we have thought about that, but as the momentum has been building and we have now reached this point—we have had questions, discussions, early-day motions, a Westminster Hall debate and now this major debate in the Chamber—we should be aiming, given that we have the implicit sanction of Mr Speaker, to take the matter back to the Select Committees and demand that those executives give evidence. If they do not want to come, they can be dragged here screaming and shouting.

Ford needs to think carefully about doing the right thing for the workers and for the brand as this rolls on and as reporters in America say, “Hold on. Why are all parties in Britain uniting to say things about the glorious Ford? What about Henry Ford? What a great bloke he was. Wouldn’t he turn in his grave if he knew what was happening?”

Other people might talk about more of the detail, but there are some difficult questions that the brand managers and marketing managers for Ford need to think carefully about. What does Ford mean now in a qualitative and quantitative group? What will it look like in a month’s time, or a year’s time? What will it look like against emerging competitors, whether they are Nissan, General Motors or whatever? How is this playing and what are people saying about it?

My hon. Friend the Member for Aberavon (Dr Francis) mentioned BP, which, of course, took an enormous financial hit after its environmental issues and also took a hit to its brand values and to perceptions of what it cares about. Those are enormous things for global players. If we, in an advanced western democracy—the seventh largest economy in the world—do not stand up for people and cannot get a global company such as Ford to come to here and do the right thing, we are setting an example for less developed countries where global players might go in and out and cause social, economic and environmental harm.

It is time to say enough is enough. We are one global community, so let us work together and play together for the good of all countries. We should bring something to the table and remember that democracies here and elsewhere will work together to ensure fair play for pensioners, for consumers and for workers, as well as good jobs and good cars. Let us work together for a better world. Come on Ford, do the right thing. Stop hiding and put your money on the table.

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[Nick de Bois (Enfield North) (Con)]

I, too, pay tribute to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) for securing this debate and the spirit in which it is being held. We have all been at pains to stress our understanding and support for Ford as a major employer in this country, and I echo those sentiments. It has a proud history and plays a very significant role in our industrial base. Notwithstanding that, I do not believe that this House has ever been prevented from doing or saying the right thing when it matters, and I think we do so in that spirit today.

I do not wish to repeat the points that have already been made, but that does not mean I do not agree with them. I will highlight one or two specific areas, but before doing so I would like to say that I, like many Members here, am conscious of Visteon’s national reach, because it has reached into many constituencies. I compliment all of them on the conduct of their campaign, which at all times has been impassioned and powerful, but also courteous and respectful. I pay particular tribute to my neighbours and constituents in Enfield, whom I admire for their tenacity, of which I have had first-hand experience. I am delighted to be here to speak for them on the matter.

Ford, we are told, even on its website today, is a family of global vehicles and global employees. I think that they probably believe that, but today we have seen the evidence that that is not quite true.

[Geraint Davies]

I need to leave the Chamber for 10 minutes to give an interview to discuss whether or not Ford is a happy family across the pond, and how important it is for us to act to make it so for the future so that everybody has their fair share. I apologise to the hon. Gentleman and to you, Madam Deputy Speaker, for having to leave, but I want to air that on the media.

[Nick de Bois]

I am grateful to the hon. Gentleman for his intervention and understand that he has to attend to pressing priorities, and rightly so.

I would like to highlight two points. We have talked about the possible lack of understanding at Ford in the US about the consequences of the decisions that were taken here in the UK. I have considerable experience—some might say that I have the scars on my back—of working in America, having worked with American businesses and set up my own business there. It is an extremely different culture, particularly when it comes to employee relations. I can speak only about my area, and of course the company was not a substantive corporation like Ford, but I know that the work force protection schemes in America are nothing like those in this country, and many say that we have some of the least onerous schemes, compared with the rest of Europe. In America, an employer can hire and fire almost at will without recompense. There are a limited set of protections for redundancy or sacking with or without cause, but it is a very different culture. We may speak the same language, but we are not necessarily united by it in our practices.

It may well be that people in the boardrooms in America do not understand the implications or the potential harm to their reputation of pressing ahead and distancing themselves from the issues facing the pensioners of Visteon. I urge them to listen carefully and to imagine themselves not in the boardrooms of America looking over here, but over here looking at it through the eyes of their UK allies and partners. They might then understand what has driven us to the Chamber today and what has driven the unrelenting cause of Visteon pensioners.