Ford and Visteon UK Ltd

James Duddridge Excerpts

Thursday 12th December 2013 Commons Chamber

[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.

--- Later in debate ---

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

It is a great privilege to follow such an enviable group of MPs, particularly those from Essex. We started with eminent words from Basildon and then moved down the estuary to those from Castle Point, and we will end—I hope on a high point—in Rochford and Southend East. Several points have been made, and I will take care not to reiterate them, even to add emphasis.

Not in the last debate on Visteon but in the one before that, my hon. Friend the Member for Broxbourne (Mr Walker) referred to Ford as

“a four-letter company, behaving in a four-letter way”.—[Official Report, 4 December 2012; Vol. 554, c. 182WH.]

Hon. Members will recognise that we normally speak in very temperate language, so people should bear in mind how strongly we all feel about this issue. Very rarely is there a debate in which such strong words are used as we have heard today from both sides of the House. It has been not so much a debate as a siren call for action. Points have been made from either side, but they have all pressed Ford in the same direction.

I must disagree with my hon. Friend the Member for Enfield North (Nick de Bois), who felt that the issue was a stylistic change between American and British business practices and some type of misunderstanding. If it had involved Baltimore rather than Basildon, or Seattle rather than Swansea, the same lack of duty of care and the same lack of moral responsibility towards employees would not have been tolerated.

I know that my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) has travelled to the US and had informal discussions with several Congressmen. I hope that in the near future that can be formalised by making a request that the US Congress look at the issue alongside us, which will increase the pressure on Ford Motor Company.

[Jackie Doyle-Price]

I do not know whether my hon. Friend has seen the film “Made in Dagenham”, but it clearly brings out the very close relationship between Ford and the unions, and how the workers trusted it to give them the best deal. In that respect, have not the workers been greatly let down? They expected a deal to be made that was good for them and they had put their trust in the company, but they were sitting ducks to be misled.

[James Duddridge]

My hon. Friend makes a very good point. Not only have I watched the film, but one of my constituents, Lesley Butcher, starred in it in a voiceover role. She is also an excellent parish councillor in Rochford, but that is her claim to fame. That goes to show what a close community we are. The community trusted Ford and was badly let down.

The motion has been signed by my right hon. Friend the Member for Chelmsford (Mr Burns). People who do not know his background might think that his speech verged on being anti-American. Given his strong passion for that country, I do not think it can be seen as anti-American. He will certainly be distraught that the project that allowed the supply chain to continue had the name Project Kennedy. My hon. Friend the Member for Castle Point (Rebecca Harris) made the very good point that this was clearly not an independent company. Project Kennedy allowed the continuity of the supply chain. Effectively, the directors and managers of Ford were shadow directors of Visteon. They were manipulating what went on in that separate company.

I hesitate to share with the House my ambitions as a young child.

[Stephen Metcalfe]

Oh, do.

[James Duddridge]

I am urged to do so, so I will. I wanted to be a Conservative Member of Parliament and I have achieved that. I wanted to have a purple pool table, and I hope that my wife reads Hansard tomorrow so that she knows what to get me as a Christmas present. I have always wanted a Ford Capri Mk II. It saddens me that, even if I had the space and the money, I would not be prepared to buy a Ford now. I am not irresponsible enough to call on my constituents, many of whom work at Ford, to boycott Ford in its entirety. However, I am sure that there are many people like me who are proud of Ford’s heritage, like Ford cars and like the Mustang that is coming out, but who would not think of buying a Ford car because of Visteon.

Every Saturday, I go to mini-football with my son and I sit alongside somebody who works at Ford. I have discussed the Visteon issue with him. I am fearful that an organisation that has made such a mistake with Visteon may very well make it again. Are the pension funds of Ford safe at the moment? If I were a Ford employee, I would be very fearful of that.

I do not know what Ford executives consider to be normal behaviour within a family, but this is no way to behave. If we follow the analogy, such behaviour would lead to divorce, family breakdown and great woes. Ford has let us down consistently. There is a small window of opportunity between now and the court case for it to do the right thing morally by our constituents, six of whom have made direct representations to me. If it does the right thing kicking and screaming, only when forced to by the courts, it deserves to take no credit whatever. It needs to act now, before the court case.

--- Later in debate ---

[Gregg McClymont]

We have to be careful, given the ongoing legal case, but the comments from both sides of the House on these issues have resonated with everyone in the House today, including with those in the Public Gallery. Both sides of the House are clear that Ford must engage with its responsibilities. The wider issue is that if companies have a responsibility, beyond the bottom line, to their employees and the countries in which they operate, the direction of travel for Ford in this case must be clear.

What more can the Government do to satisfy the demands of Ford Visteon pensioners? I would be delighted to hear the Minister outline what the changes to the PPF cap mean and talk about the wider issue of ensuring that such pension transfers do not end up being to the great detriment of employees.

[James Duddridge]

On what more the Government can do, in my speech I explained that—doing my bit in my small way—I would not be buying a Ford Capri Mk II. The Government have a bit more purchasing power than the Duddridge household. How does the hon. Gentleman feel about the Government reconsidering purchasing Ford vehicles until this matter is resolved?

[Gregg McClymont]

That is a question for the Minister, who is just about to respond to the debate.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I join in congratulating my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on his work as chair of the all-party group and his perseverance over a number years in raising this issue, along with the officers and members of the all-party group, which is well represented today. Such unanimity across the House, across political parties and across parts of the United Kingdom is rare and is all the more telling for that. The House has spoken today with a single voice. Those who follow our proceedings, both in person and by other means, will have heard clearly the single view of the House of Commons.

As you will be aware, Madam Deputy Speaker, at the beginning of our proceedings your fellow Deputy Speaker relayed Mr Speaker’s guidance. We respect that guidance, of course. I am particularly conscious of the need to avoid saying anything that would in any way undermine or prejudice the case being brought by Unite the union and by individual former Visteon workers. We want to see justice done through due process. I hope the House will understand that my remarks are slightly more guarded for that reason.

We discussed this matter almost exactly a year ago in a debate in Westminster Hall that raised many of the same issues. In the course of that debate, I said that I was particularly conscious of the Visteon workers ending up in the Pension Protection Fund and, as hon. Members have said, finding that the pension they receive is not much more than half the pension they were expecting. With my hon. Friend the Member for South Basildon and East Thurrock, I met members of the Visteon Pension Action Group in summer 2012, and it was their individual case studies that made me acutely aware of the impact of the PPF cap on their entitlements under the scheme. As I explained at the time, the thinking behind the cap was to ensure that what I loosely call the “fat cats” of the scheme, the people right at the top, could not manipulate matters and still receive a full pension. That was why the previous Government introduced the cap. It was my judgment at the time, and it remains so, that the cap was having an unfair and adverse impact on people who had relatively large pension entitlements not because they had earned phenomenal amounts of money, but because they had given very long service.

During the debate, my hon. Friend the Member for South Basildon and East Thurrock referred to his constituent Mr Varney, who had about 38 years of combined service with Visteon and Ford, and my hon. Friend the Member for Maldon (Mr Whittingdale) referred to his constituent Mr Sharpe, who had served for 27 years. These are the sorts of workers potentially caught by the cap, depending—obviously—on their wage. I said in last year’s debate that we were looking at whether we could do something about that, and I am pleased to confirm today that we have acted upon that promise. The Pensions Bill, which is now in another place, provides that for those who have been members of a scheme for more than 20 years, the cap should be increased by 3% for each additional year they are above the cap. Obviously I cannot comment on individual cases but, in principle, someone who has served for 38 years would have 18 lots of 3% so a cap 54% higher than the standard cap. If they were still capped at that point, as it were, their pension would be 54% higher than it is currently.

Sadly, these things take time—the Bill has not passed the other place and when it has we will have to produce detailed secondary legislation—but I can assure the House that we intend these higher rates of payment to be in place in the lifetime of this Parliament and to apply from that date onwards. They will not be retrospectively applied, but they will apply to schemes already in the PPF, such as the Visteon scheme. I am aware that probably only 60 or 70 Visteon employees will be affected by this measure, but I hope that for them, who have suffered the biggest proportionate loss, this will be of some benefit.

[James Duddridge]

I fully support the payment protection being discussed, but if I follow the logic correctly, the Government are, in effect, paying for Ford’s failure to take moral responsibility. Will there come a point when the Government look to Ford to repay money they have paid out through the PPF?

--- Later in debate ---

[James Duddridge]

I totally agree that constructive dialogue will provide the right way forward. It is what everyone has been trying to achieve ever since the first debate on the issue. If that constructive dialogue does not produce the results we hope for, will the Minister consider seeking a meeting with his opposite number in the United States to see whether any political options across the pond could be explored to encourage everyone to do the right thing?

[Steve Webb]

At the back of my mind is a feeling that I would not want to meet my hon. Friend in a dark alley at night. I am not sure why I have that feeling. [Laughter.] My hon. Friend put his point forcefully. Given that representatives of Ford have agreed to meet me in a spirit of constructive dialogue, I shall leave it at that for now, but we shall clearly have to reflect on what further actions could be taken.

Finally, let me reassure members of the all-party parliamentary group that I shall be happy to report the outcome of my conversation with Ford UK to their office. Obviously I do not want to raise any false hopes—Ford’s position is well known, and I do not want to pretend that it has suddenly changed—but I am trying to engage constructively with the company, and I hope that the company will engage constructively with the House.