Ford and Visteon UK Ltd

Rebecca Harris Excerpts

Thursday 12th December 2013 Commons Chamber

[Rebecca Harris (Castle Point) (Con)]

I, too, congratulate my parliamentary neighbour, my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), on his outstanding work in chairing the all-party group on Visteon and on securing this important debate.

It is very sad that, in the year the Ford family is celebrating the 100th anniversary of its first moving assembly line, we are having a debate about how poorly it has treated former proud members of its family and about how best we can support them and—I think we are all united in this—persuade Ford to recognise its moral obligation following its treatment of Visteon workers.

Ford has a good reputation for looking after its staff, and those constituents of mine who still work for Ford speak very highly of the way they are treated by the company. They have a great attachment to the brand and genuinely feel part of it. I think that makes the situation rather more heartbreaking for Visteon workers, who used to wear the familiar Ford logo with pride, but now feel compelled, after the treatment they have received, to campaign with a blue oval “Fraud” logo on their hats instead.

When I first became aware of the closure of Visteon, I, like many others, may have initially mistaken it for yet another sign of the depressing state of the economy back in 2009. It was not until I met a substantial number of residents who had previously been Visteon employees that it became very apparent to me that its collapse and the subsequent pensions issue for former employees was down to something more sinister, some of the details of which have already been well covered.

At that first meeting in my office, I was struck by what a sensible and level-headed bunch of men they were. They were definitely not the kind of men, in my opinion, who would recklessly take any advice from or let themselves be conned by a flashy sales pitch that other people might have said sounded too good to be true. Put simply, they are men who had worked hard all their lives to provide for themselves and their families, and for what they hoped would be a decent standard of living in retirement. In political-speak, we would say they are people who have worked hard and done the right thing, and that is why we are all in unison in supporting them in their fight with Ford.

I hope they will not be offended if I say that they are not all of an age whereby someone could glibly suggest that they go and get another skilled career in order to rebuild their shortfall. As we have heard, some of the Visteon pensioners have already passed away and missed the opportunity to be recompensed, and therein lies the rub.

These are people who gave many years of loyal service to Ford prior to the establishment of Visteon. They trusted the advice given by Ford at the time—that their pensions would be safely protected in the new arrangements; otherwise, they would never have moved over to Visteon. I add my own admiration to that voiced by colleagues for the effective and downright dogged way in which they have run their brilliant campaign, including demonstrating outside the Ford dealership in Rayleigh Weir in my constituency every Saturday, come rain, snow, blistering sun or, on occasion, flood. I commend them for their determination.

Let me get back to the basics of the matter. Visteon was spun off by Ford in order to reduce its operating costs. It was never functionally independent because it relied on Ford for about 90% of its business. Ford was even in a position to dictate the price at which it could buy back its product. In fact, I understand that it agreed a pricing pathway with Visteon management at the establishment of the company, but that agreement was never stuck to. The staff who transferred from Ford to Visteon were never even given separate contracts with the new company. Of course, with the benefit of hindsight one might now say that a successful multinational such as Ford was hardly likely to create and spin off a company that would be respectably profitable in the future. Perhaps that was the only warning sign we had.

Given what we have heard over the past three years, the situation seems to have gone further than that. The House has heard the view that Ford set up Visteon to fail, and loaded the pension fund with a deficit that was never going to be sustainable. What is even more unforgiveable for the former Ford employees is that it would appear that Ford—the primary customer of Visteon products—had actively anticipated and planned for the shutdown of UK Visteon operations since way back in 2006.

The Visteon Pension Action Group has documents compiled by Ford management—which went to great lengths to keep them away from Visteon employees—that give details of plans for projects to allow other companies to seamlessly pick up the supply chain when the UK plants closed. The high-level project was apparently known as “Kennedy”, and was directly controlled by Ford Motor Company personnel who were responsible for agreeing new supplier sources and the cost and quality of new products, and for releasing those products into the Ford production system. Visteon UK, as the incumbent supplier, was responsible for identifying potential new suppliers and developing them to meet Ford criteria for cost, quality and supply logistics. I gather that such lower-level projects were known as Protea, Cummins D3 and Arrow. They do not mean an awful lot to me, but they do to the pensioners in the action group.

It should be noted that, depending on product complexity, normal resourcing action takes between 12 and 24 months to allow time for the manufacture of new tooling, initial production runs, quality and testing checks, and supply filling. It therefore seems quite clear that Ford Motor Company was directly involved in such resourcing actions. When Visteon UK stopped supplying Ford very abruptly on going into administration on 31 March 2009, Ford vehicle operations did not stop for one second due to any lack of parts. Stockpiling of Visteon parts had taken place and the new supplier parts were available immediately. As we have heard, it is of course completely reasonable for companies to put in place contingencies in case a supplier folds, but that eventuality was completely within the power and design of Ford Motor Company.

It seems to me that Ford was therefore involved in the deconstruction of Visteon at least three years before the company went into administration. Ford knew that the pension fund deal it had put in place, and which it had encouraged its workers to take—allowing them to trust it in moving on to that deal—would mean that thousands of employees would be left out of pocket. That is why I believe that Ford has a moral obligation to come to the table with MPs and the Visteon Pension Action Group to agree a fair and just deal for Visteon employees.

The cause of the action group has been greatly frustrated by the fact that tougher rules on pension regulation came in several years after the Visteon pension scheme was established. I welcome the Government’s announcement earlier this year that the cap on compensation payments from the Pension Protection Fund will rise to 3% for pensioners with a record of more than 20 years’ service.

It is my sincerest hope that executives watching this debate in the boardroom in the States take note of what has been said today, and of the damage that the whole situation is doing to their otherwise good reputation among their own employees and to their brand in general. Finally, I once more congratulate the members of the Visteon Pension Action Group on their campaign so far, and I assure them of my and my colleagues’ continued support in this Chamber for their fight, because they all deserve justice.