Ford and Visteon UK Ltd

Nick de Bois Excerpts

Thursday 12th December 2013 Commons Chamber

[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.

[Stephen Metcalfe]

Does my hon. Friend agree that had the situation occurred in the United States and 3,500 employees who had worked for such an iconic corporation were banging on Ford’s front door in Dearborn because they had had their pensions reduced so dramatically, the issue might have been solved long ago? It is out of sight and out of mind over here.

--- Later in debate ---

[Nick de Bois]

I am afraid that I have to agree with my hon. Friend. I cannot give an example off the top off my head, but it is certainly true that companies are often preoccupied with what is happening on their own side of the pond, whichever side that is, and even for a global corporation it is still challenging to understand the dynamics that drive the worker-employee relationship and the customer relationship. He makes the point extremely well.

We have heard evidence today that Visteon was, to all intents and purposes, a captive supplier—of that there is little doubt. Given the choice of being a captive supplier or a partner, of course companies in these business environments seek to be a partner. As a supplier, they have to strive for a long-term relationship to guarantee the future of their business and employees. It is interesting that Ford’s supply chain strategy, which was started some considerable time ago, was to develop an aligned business framework with suppliers that recognised the need to work closely with it in a way that is, according to its website,

“designed to create a sustainable business model to increase mutual profitability”

and encourage a long-term partnership. That implies a deep and close understanding of the business dynamics at play in Visteon, including the financial accounts; it cannot mean anything else.

I was surprised to read that Ford spokesmen still stick to this line:

“While Ford recognises the severity of the situation for former Visteon UK employees, Visteon became an independent company in 2000 and was responsible for its own business decisions.”

That does not sit comfortably with the reality of working with a captive supplier or partner, or someone who aspires to be an aligned business framework supplier. That suggests that there are grounds for genuine doubts about whether the demise of Visteon was part of a strategy, first, to reduce a burden of cost on Ford’s balance sheet, and subsequently, to change its supplier base. I carefully say that it is perfectly legitimate to ask that question in the light of its strategy statements about how closely it works with its suppliers.

The moral case has been explored today, and I obviously add my weight to that, but let me add some perspective on the financial matters facing Ford Motor Company globally. Yes, it faced some challenging times. Certainly, the whole industry faced some challenging times, not least in the previous three to five years that we know about all too well. However, its record now is more than satisfactory. While its European business is still undergoing some financial restructuring, the last quarter saw a $1.27 billion profit. In fact, its operating basis was $1.82 billion for the quarter, but the notes to its accounts say that that was reduced to $1.27 billion because it was restructuring in Europe, including large pension lump sum payoffs. If my constituents and the other Visteon pensioners were part of those payoffs, this would be a far happier time for them and for the Members in this House who represent them.

I urge Ford in the US not only to challenge itself on the moral case but to look itself in the eye and say that this is a relatively small price for an exceptionally profitable company whose results have been delivered by employees who not only worked for it but then worked in its supply chain. Then it can live up to the values that it has until recently had cause to be proud of.

--- Later in debate ---

[Gregg McClymont]

My message would be the message that has come from across the House, including from the right hon. Gentleman, which is that we must engage seriously with the issue at hand and Ford must face up to its responsibilities in this matter. As has been said—again, by Members from across the House—Ford is a company with a strong imprint in the UK and has been here a long time. Unless the public are confident that Ford will play by the rules and treat people fairly, the potential damage to Ford’s brand is obvious. “Brand” can sound rather advertisement-like, but the position is very simple.

[Nick de Bois]

The hon. Gentleman talks about the brand and the customers, but it looks to me as if Ford has treated a supplier abominably. Perhaps there is a message that could go out to suppliers that is an unhealthy one.

[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.