Ford UK (Duty of Care to Visteon Pensioners)

Stephen Metcalfe Excerpts

Tuesday 4th December 2012 Westminster Hall

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

It is a pleasure to serve under your chairmanship, Mr Caton. Thank you for calling me in this important debate. I add my congratulations to my hon. Friend the Member for Finchley and Golders Green (Mike Freer) on securing the debate. It was a joint effort, and he was the successful candidate. He opened the debate very professionally, laying out the landscape so that we can fully understand the impact of the closure of Visteon.

I thank colleagues from across the House who have supported me on the issue. My involvement goes back to 2009—before I was elected—when I heard about the closure of a business on the other side of the constituency boundary. Over the past three and a half years, I have become more deeply involved, and I have received support from many colleagues. The fundamental reason for that is that we all share the same concerns on behalf of our constituents.

When the business collapsed, there were obviously redundancies, and there were also calls for compensation and holiday pay—in due course, some of those were met—but at that point the full ramifications were not fully understood. It was not until just before the election in 2010 that I began to understand that those ramifications went much wider than people losing their jobs. Very early on in my newly elected role, a gentleman came to one of my surgeries and asked for help. He told me that Ford had failed him. He said that he was a former worker of Visteon and that his pension has been dramatically cut. He went on to tell me about other people who had had their pensions cut by up to 45%. The more I looked into the matter, the more I came to realise that Ford had a responsibility and a duty of care to and for its former employees, which is what we are here to debate today. That is why I have pursued this issue over the past two and a half years.

In our attempts to get justice for our constituents, we have held meetings with Ford and former Visteon employees, tabled an early-day motion and met Ministers, whom I am grateful to for giving us their time. I have asked questions on the Floor of the House and we have asked questions outside of this place. I have met the administrators, KPMG, and the Pension Protection Fund. I met a representative from the relatively new Visteon Engineering Services, which was one of the companies that spun off from Visteon before it collapsed, and which has been very evasive about coming to talk to us as a group. We have recently established an all-party parliamentary group, of which I am chairman. Through that organisation, we have started to hold evidence sessions to try to gather more detailed information. Most recently, we have, through our joint efforts, managed to secure this important debate.

After all those discussions with the various organisations, I keep coming back to the fact that Ford had the greatest responsibility for its former employees.

[Rebecca Harris]

Does my hon. Friend agree that the degree to which the affected pensioners, with absolute unanimity, blame Ford for the situation is quite astonishing? I have not had one constituent say that they are disappointed with the management of Visteon. As they stand outside the Ford dealership on Saturday mornings, they unanimously hold Ford responsible.

[Stephen Metcalfe]

Indeed. The reason for that is that while there may be issues of mismanagement within Visteon, many of the individuals whom we represent spent a lifetime working for Ford. They felt part of the Ford family, and they were transferred out of that business into a new business. They felt that they had safeguards, but when it came to it those safeguards were not worth the paper they were written on. That is why they hold Ford responsible.

[Mike Gapes (Ilford South) (Lab/Co-op)]

I apologise for being late for this debate, but I am pleased that I am able to hear the hon. Gentleman point to his own role in establishing the all-party parliamentary group, which he has done such a lot to promote and encourage, and I congratulate him on that. As someone who has had constituents who worked at Ford over decades, I know that the points he has just made are absolutely right, and we need to pursue the matter until we get satisfaction.

[Stephen Metcalfe]

I thank the hon. Gentleman for his words. We are aware, and we have also been warned by you, Mr Caton, that the details of this case are the subject of legal action. The details of whether Ford is legally responsible for its former employees will be tested in court, and that is right and proper, so I do not want to talk about that.

However, I do want to discuss the reasons why Ford has a moral responsibility for this issue. May I state for the record that this is not personal? I have great respect for the individuals at Ford—for Joe Greenwell, who is the chairman of Ford of Britain and for Christophe Clark, head of Government affairs. I have always found them to be open, accessible and willing to engage with the group and come and talk to us, and I recognise that this issue is outside of their control; it is not in their hands. They are neither directly or personally responsible for the case. In return, I want them to understand that I am standing up for my constituents and trying to get justice for them and that this is not a personal attack on them or on Ford per se. None the less, I, like many others, believe that Ford has an obligation towards its former employees.

I must also pay tribute to the Visteon pensioners action group, which has been utterly tenacious in its pursuit of justice and completely committed to its cause. Without its dedication, this issue would have slipped off the agenda a long time ago, leaving thousands of pensioners with no hope of recompense.

As I have said, Ford has a moral obligation to its former employees, many of whom have spent a lifetime of work at the company. I became aware of the issue just after midday on 31 March 2009 when what we now know to be a very troubled company finally met its end—Visteon, a firm many will never have heard of, was placed unceremoniously into administration. When the administrators arrived, they turned off the machines, sacked the staff, turned out the lights and locked the doors, and that was that.

Many would say that Visteon was just another victim of a worldwide economic crisis and that as an automotive parts manufacturer, the collapse in car sales made its position untenable. Although those are contributing factors, the whole story is somewhat more complex. Sadly, in the wake of the collapse, there were not just hundreds of unemployed workers at every level of the business but thousands of present and future Visteon pensioners who had been seriously disadvantaged. Moreover, there are many hundreds, if not thousands, of Visteon pensioners, who have worked for Visteon, who do not yet know that they have been disadvantaged and may not find that out until they come to retire. Although VPAG and various other groups tried to get in touch with the beneficiaries of the fund, not all of them have responded, which is a great shame.

What has all this to do with Ford? Visteon was not just another business that failed to adapt to the modern world, but part of a large American corporation. Interestingly, Visteon Corporation went into chapter 11 shortly after Visteon UK collapsed. We all know that Visteon was Ford’s global parts manufacturer. It was a multi-billion dollar business, supplying everything from brake drums to radiators. It had started off as part of Ford, but soon became a separate trading arm before eventually being spun off. Why was it spun off? It is true that there seemed to be a trend in the late 1990s and early 2000s to spin off businesses and to separate out the manufacture of parts from the main business, but what was the reason behind it? The answer to that is relatively simple and the crux of why Ford has a responsibility to its employees. Ford wanted out. I have this nagging feeling that someone somewhere within Ford decided that they wanted to get out of the parts manufacturing business; it was too expensive, too labour-intensive and Ford knew that it could get the parts cheaper elsewhere. That is why Visteon was born.

We heard the evidence from my hon. Friend the Member for Finchley and Golders Green when he quoted Tim D. Leuliette, the new chief executive of Visteon Corporation—it is now out of chapter 11 and is being restructured—who, when asked whether Visteon ever had a chance, said, “No”. He told us about the labour costs, the burden, the overheads and how it was a joke. He then said:

“It was sort of like when you’ve got an uncle you know has got a problem but no one in the family wants to talk about it.”

That is quite important, because Ford always talks of itself as a family. In 2011, it was Ford’s 100th anniversary in the UK, and Bill Ford came over to the UK and made a speech at the Science museum. There were a couple of telling remarks in his speech. He said:

“I have always thought of Ford employees, dealers, suppliers and partners as members of our extended family. My visit here has confirmed that belief—it has felt like a homecoming.”

Further on, he said:

“Ford of Britain has a proud heritage…The United Kingdom quickly became the most important market for our cars outside of the United States.”

There is no doubt that here in the UK, Ford has played an important role. If this is how Ford treats its family, I would be sad to think that it would treat other people in its family in the same way.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

I acknowledge that my hon. Friend probably has as deep an attachment to this issue as any other colleague, and many hon. Members have spoken with great knowledge about the issue today. Does he detect any way in which we can achieve anything in the court of Parliament if a favourable answer is not found in the courts of law?

[Stephen Metcalfe]

I thank my right hon. Friend for his intervention, and yes, that is really why we are having this debate. Ultimately we all believe that, whatever the outcome of the court case, Ford has a moral obligation and that if it does not meet that moral obligation we will continue to highlight the fact that it has failed its former employees. One of those former employees worked for Ford for 30 years before working for Visteon for only three months, but they have now suffered a significant loss in pension.

As I have said, the courts will test the legality, but the moral case stands for itself. Ford wanted out of this expensive business, and that is why it spun off Visteon. Ford talks about being a “family”, and the reason why its former employees feel so aggrieved is that, because they felt part of that “family”, they trusted their employer, Ford. Ford is a blue-chip firm with a history going back to before the first world war, and its employees were told that their pension was secure. The employees took that at face value. Of course, perhaps in hindsight they should have sought a little more clarity and explored what that promise meant, but they were allowed to take away the general impression that their rights were protected and that they were still part of the Ford “family”.

If those employees had looked a little more deeply and if they had considered the nightmare scenario of the business collapsing and the pension fund being underfunded, perhaps things might have turned out differently; perhaps they would not have transferred and perhaps it would have been more difficult for Visteon to spin off. But they did not do those things. They took Ford at its word and Visteon was floated off in a vessel that I believe was already holed below the waterline even though it was trying to make its way in the world.

[Geraint Davies]

It is bad enough that Ford basically agreed terms of reference—it agreed wages and conditions, and pensions for a group of workers—but then hived them off and looked, as it were, to the future for lower costs. However, does the hon. Gentleman agree that the pension costs are actually historical costs that should be honoured, irrespective of what happens in the future? Those pension costs are a part of the contract of employment in the past that should be signed and sealed. The workers thought those pension costs were signed and sealed, but now they find that they have been ripped off.

[Stephen Metcalfe]

I agree with the hon. Gentleman. People were left with the impression that they had protection and that a pension was their right, whatever happened. They were also left with the impression that once they retired, at that point their pension was secured for them. Little did they know that it could be cut at some later date from a business that they might have been detached from for the best part of a decade, and suddenly they would turn round one day and find that, because of something they had virtually no involvement with, they are now seriously disadvantaged.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Notwithstanding the point about the courts determining a contractual issue, is it not important that Parliament has united around concern about mis-selling of interest rate deals? This is a similar scandal, in terms of not only presenting a product but actively encouraging employees to take it up. Parliament has expressed a similar scale of concern about such products.

[Stephen Metcalfe]

I agree with my hon. Friend entirely. That aspect of the case will be tested in court, to see what promises were made and how they were communicated to the work force. What I am championing in Westminster Hall today, with other colleagues, is the case that Ford must meet its moral obligations to its former employees. However that is achieved, I believe that Ford has a moral obligation.

We have heard about other allegations of unilateral price changes, which of course Ford denies; of the pension fund being underfunded, which could be explained as a technical issue involving different valuations; and of Ford moving work away prior to the collapse of Visteon to ensure that its supply chain was not interrupted, and it is interesting to note that Ford never lost a day’s production because of the collapse of Visteon.

However, I will return to my main point one more time before I finish. I suspect that Ford did not want the hassle, the expense or the reputational damage of shutting down its expensive British parts manufacturers or other expensive plants around the world, so it spun them off knowing that ultimately it would be able to source the parts cheaper elsewhere and knowing that Visteon UK probably had no long-term future. I believe that that was known at the time that Visteon UK was spun off.

[Sir Peter Bottomley]

I referred earlier to the main board of Ford United States. My reckoning is that five of the present board members were directors from before 2000: Edsel B. Ford II; William Clay Ford Junior; Irvine O. Hockaday; Ellen Marram; and John Thornton. Homer Neal was also possibly a director from before 2000, which would make six current directors who were in that position. Could they be asked what they knew, if they still have the relevant papers and whether they were ignorant of what was going on in a major supplier in this country?

[Stephen Metcalfe]

Yes. That is a very interesting point and one that, as a group, we should pursue. We have been communicating with Ford UK and Ford Europe, but we should take this matter all the way to the main board of Ford in America.

It is interesting to note that the arrangements in the US are different from the arrangements here. The former employees of Visteon in the US have not been disadvantaged in the same way as the former employees of Visteon in the UK, and if this issue was on the doorstep of Ford’s head office and the 3,000 Visteon employees had been so disadvantaged closer to home, we might have had a different outcome.

[Geraint Davies]

The hon. Gentleman knows that the all-party group in support of Visteon pensioners has no power to require people to appear in front of it, but of course Select Committees can summon people. Does he agree that it would be helpful if the Minister perhaps signalled that that was something that he would encourage so that there was redress and people had to be accountable?

[Stephen Metcalfe]

Yes. I have written, and I know that other colleagues from across the House have written, to the Chairmen of various Select Committees, asking them to look at this issue, either on its own or as part of a wider inquiry into pension transfers. We can renew that call now; summoning people before a Select Committee would be a very positive step.

As I have said, I believe that people within Ford knew at the time that Visteon was spun off that there was no long-term future for Visteon. I do not want to damage my relationship with Ford; I have great respect for the company. I want it to succeed, and it has a great and noble history in this country. But even the best employers or organisations occasionally get things wrong, and on this occasion that is what has happened—Ford has got it wrong. It needs to stand up and meet its obligations. If it does so, I believe that people in this House and outside it will view Ford as being all the better for having done so.

That is why I am championing the cause of the Visteon pensioners, and why I am standing up for my constituents. I will continue to do that, and I will continue to fight until I get justice for them.