Even robots still need humans, but car makers use Welsh workers less and less

The closure of the Linamar factory in Swansea shows once again that Wales is far too often buffeted by the misfortunes of international business. Now is the time to take charge

 

PEOPLE in politics – like people in other walks of life – will frequently tell you how hard they work, how tired they are. It’s understandable – after all, elbow grease is an attribute that voters take into consideration come election time.

But even from inside the bubble, it is easy to become cynical about such claims. Last week, as the Assembly entered its final week of sitting before the summer recess, the 200-strong workforce at the Linamar plant in Swansea agreed, with heavy hearts, to accept the redundancy package put forward by their Canadian auto manufacturer employer. Their decision brings to an end half a century of component making on the site and effectively closes the chapter on car manufacturing in the city. It’s also a huge personal disappointment, as I had been working with the union and workforce, attempting to liaise with Ford (a principal customer) and lobbying ministers in an attempt to secure the plant’s viability, as closure has loomed over Linamar Swansea for the best part of a year now.

All of this, however, must take second place to support for the workers, who now have to begin hunting for jobs in a recession. Therefore, I was very surprised when they told me that Ford, now recruiting at Bridgend ahead of the start of its Ecoboost engine programme, had refused even to send application forms to staff at Linamar, or extend the deadline for getting them in, which was a week ago last Friday. What introduces doubt where Ford’s actions are concerned, if the claims are correct, is that many of the Linamar boys and girls have extensive experience in auto manufacture not only through the present company, but because they have in the past worked for Ford and Visteon, previous occupants of the Fabian Way site. In a world where industry voices continuous concern over the sourcing of skills, why would any business shut its doors to such experience?

Ford’s name is often less-than-glorious in this part of South Wales West. Constituents who worked at the Fabian Way plant will tell of their suspicions of disputes and walk-outs contrived at times of over production, along with a whole host of other clever tricks to keep costs in check. But its reputation has really gone to the wolves over its involvement in the life and death of Visteon UK.

Prior to 2000, the cost of transferring car parts manufactured by Ford between its many plants (and, at this time, the corporation was still producing vehicles in the UK, at Dagenham) was paid for in what was known as “wooden dollars”. What this meant was that the cost of the part was added to the ultimate price tag of the vehicle.

But with workforces in the BRICs economies beginning to become available, Ford – like many other companies at this time – saw that it could reduce its component costs while retaining the prices it charged, thereby increasing its margin. It took the decision to spin out its components division, assisting in the creation of the Visteon Corporation, and effectively creating an internal market.

What happened after this is well documented and likely to form the basis of a forthcoming court case between Ford and the Visteon workers’ union Unite. Having been involved with this campaign to recover the pensions of 700 former Visteon workers from Swansea for over a year now, I – along with my Plaid Parliamentary colleagues – am currently in correspondence with the new government, calling for a Parliamentary investigation into the cause of Visteon UK’s collapse (the last Labour government – oddly – had no stomach for such an inquiry), as well as liaising with the Pensions Regulator, which continues to look into the company’s demise.

What is clear is that Ford didn’t give Visteon a chance. It insisted that component manufacturing staff that switched to the new company had their terms and conditions ‘mirrored’. Saddled with high contribution final salary schemes and having been told almost immediately by Ford to cut prices by a third, the new company took a three-year pension holiday. During that time, it retired most of the longest-serving members of staff and filled their posts with new staff on less generous terms. This presumably answered short-term cashflow challenges, but had two far more detrimental effects longer term.

Firstly, as those staff moved into early retirement, the number of contributors to the final salary scheme fell sharply, from 11 contributing to 1 receiving to 0.2 workers for every retiree. Secondly, when Visteon UK went bust on March 31 last year and the company applied to enter the Pension Protection Fund because its own scheme was in considerable deficit, it led to the situation where, among the 3,500 former Visteon workers who were left pension-less, there are workers that spent 30 years contributing while working at Ford and only six months at Visteon who have been left with nothing for their retirement.

But there is a wider picture to consider here, too – one that I made during a short debate in the Assembly several months back, and one that I have been trying to impress upon the new Pensions Minister, Steve Webb. If Ford is allowed to escape its pension obligations where Visteon staff are concerned, it gives a green light to every less-than-scrupulous corporation around the world that the UK provides a no-questions-asked dumping ground for in-deficit pension funds. This would only place further pressure on the PPF – or, more importantly, its contributors. These are businesses that are compelled through a levy to finance part of the fund – something they might justifiably challenge if there is further reason to doubt its equitability.

But it also brings us to the point where, in the depths of this recession, we should be asking what kind of companies we want here in Wales. Do we want blue chip names at any cost, even if they play fast and loose with the vagaries of international corporate responsibilities, skipping in and out of different countries, with inevitably poor consequences for their Welsh workers – and for the tax payer, too, when Unison estimates that it costs the public purse around £16,000 every time a person is made redundant? Or should we rather instead focus our attentions on turning our many, many SMEs into world beaters?

I recently met with a project team working on an incredibly exciting project near Port Talbot. If the scheme goes ahead – and there are a number of significant ifs to be answered – it will be anchored around a plant built by Scottish Energy. As I heard this, I wondered to myself: “Why couldn’t it be built and run by a Welsh company?” This may have been prompted by research I read earlier this year which showed that a large number of SMEs in Wales are sold when they are between five and seven-years-old. The research concluded that it was because too often the boards and management teams simply to not have the wherewithal to take their business to the next level.

The new Economic Development Programme goes some way towards addressing the issue of focusing on bringing along homegrown businesses, despite what the immediate responses of some Tories suggested. This is because it is in the development of the skills base that we can provide people with the tools to start and develop their own companies into ones like Scottish Power.

There has been criticism that the ERP contained no numbers, simply policy flavours. That’s true. But it’s a hugely ambitious programme of work. The proof of its worth must come in its delivery, and here it could learn from the outcome of the Linamar closure. By the company’s own measurement, the Swansea plant was one of the best performers across the business. What work there is will go to Linamar’s Mexico factory, one of its worst.

Can we blame Linamar? Certainly. But it is worth remembering that Linamar came to Swansea with reassurances that it would be sourcing contracts from Ford. Those contracts – certainly where Ford Bridgend is concerned – never came. Meanwhile, the Welsh Government has given Ford a £16 million grant towards the development of Ecoboost facilities there.

Did it insist on a degree of local sourcing when it made the award? Not as far as we know. Should it have insisted? Well, there are arguments for and against, and here’s where the difficulty in giving grants – or loans, as they shall be from now on – lies. A company like Ford can dangle the carrot of plenty of work before a government and then coyly ask for grants to make it ‘viable’. Terrified that not only will the contract slip through their fingers but also with it will go any existing work, ministers hastily reach for their cheque books. They simply don’t have the time or the bargaining position to attach strings, we are led to believe. Quite simply, this makes inward investors too powerful.

But much of this would be moot if the Welsh Government was to adopt a recommendation in the recently-published final report of the Holtham Commission, seeking successful discussions with the UK Government in order to vary Corporation Tax in Wales. Although the commission admitted that such a move would “carry acute budgetary risks”, it concluded that such a suggestion should be weighed against its “potential … as a development tool”. Such a recommendation would put Wales ahead of Scotland because, as the Campaign for Fiscal Responsibility pointed out this week, it would give us greater devolved financial powers. CFFR founder Ben Thomson said of Holtham the report: “This certainly is a move in the right direction and goes a lot further than the proposals put forward by Calman.”

But it could effectively hand the power over inward investment back to the Welsh Government. This is crucial, not least because it has far wider economic consequences to take account of than simply the narrow considerations of a business looking to set up in Wales.

Both the ERP and the Holtham reports provide clear ways for building a successful future Welsh economy. But, in many ways, they seek to turn a battleship, unpicking and redrawing ways that were established as far back as the Post War period. It is my belief that Corporation Tax variance could be won for Wales significantly sooner. We need indigenous world-beating Welsh businesses, but they need time to develop. In the meantime, Wales must protect and enhance its reputation by continuing to attract blue chip companies. However, we must do it on our own terms. This recession, and lessons like Linamar, shows us why.

- This piece also appears on WalesHome.org

Mae’r AC Plaid dros Orllewin De Cymru wedi bod yn gweithio gyda staff a swyddogion yr undeb yn y ffatri ers sawl mis, ar ôl iddi ddod i’r amlwg bod y perchennog Canadaidd yn dioddef anawsterau wrth sicrhau cytundebau. Mae hi wedi ysgrifennu at Ford i ofyn am ei strategaeth gaffael, ac mae hi wedi gofyn sawl cwestiwn i’r Prif Weinidog ac aelodau eraill Llywodraeth Cymru am Linamar.

Dywedodd: “Cymerodd Linamar dros reolaeth y ffatri o Visteon gyda’r addewid o gytundebau wedi’u sicrhau gyda chwmnïau ceir, gan gynnwys Ford. Mae’n amlwg, o’r hyn y mae gweithwyr yn y ffatri wedi dweud wrthyf, er gwaethaf y ffaith y gwnaeth Linamar yr hyn a allai i ddod â’r gwaith yna i Abertawe, nid oedd llawer o’r gwaith yna wedi ymddangos yn y diwedd.

“Mae Llywodraeth y DU wedi buddsoddi biliynau, yn ogystal â grant sawl miliwn o bunnoedd gan Lywodraeth Cymru, er mwyn i Ford adeiladu’r peiriant hwb eco newydd ym Mhen y Bont. Fodd bynnag, mae’n debyg nad yw’r gwaith yna yn mynd i gyflenwyr lleol fel Linamar.

“Pan ofynnais i’r Prif Weinidog am hyn, yr unig ateb a allai roi oedd ei bod yn gobeithio y byddai gwaith yn dod i gyflenwyr lleol. Do’n i’n ddim yn meddwl bod hynny’n ddigon da ar y pryd, ac yn sicr nid yw’n ddigon da nawr. Dylai Llywodraeth Cymru fod mewn sefyllfa i  fynnu amodau pan mae’n rhoi grantiau.

“Fel hyn, mae rhaid i Ford rannu’r bai am fethiant Linamar i barhau.”

“Byddwn yn cefnogi Unite yn ei ymdrechion i achub ffatri Linamar, ond mae gennyf i bryder bod yr undeb heb wneud digon yn ddigon buan.”

Bethan speaking at the Visteon rally outside Unite's London headquarters in March this year

BETHAN Jenkins AM has welcomed the news that the union Unite is to take forward legal action against the Ford Motor Company, accusing it of mis-selling pensions to thousands of its former workers.

Bethan, the Plaid AM for South Wales West, has been campaigning with members of the Visteon Pension Action Group for over a year to have the car maker taken to court, claiming they were wrongly made to leave the company’s pension scheme once the car components part of the business was spun-out in 2000 as Visteon.

Some 3,500 former workers – including 700 from Swansea – were told they could lose as much as half their entitlements when Visteon UK went into administration last year and the company applied to enter the Pension Protection Fund.

Bethan said: “There are crucial issues for Ford to answer here. It has described the situation as “unfortunate”, but I would contend that it compelled its former workers who moved over to Visteon to join a scheme with the new company by claiming – incorrectly – that it could not legally allow them to stay in the Ford fund. In fact, Inland Revenue makes provision for such an eventuality. Ford should have known that.

“In addition, Ford never really gave Visteon UK a chance. It forced the new business to take on staff on ‘mirrored’ salaries and conditions, and then shortly afterwards demanded that Visteon reduce the price of parts it supplied to Ford. The net result of this is that Visteon UK never turned a profit in the nine years it was in existence.

“That, however, is not likely to feature in this court case. So I have written to both Ieuan Wyn Jones, the Deputy First Minister, and Steve Webb, the new Minister of State for Pensions, to urge them to join calls – echoing those made by Plaid MPs – for a full Parliamentary inquiry into the history of Visteon UK and what role Ford could have played in its collapse. The Visteon pensioners should be entitled to know.”

Economic Renewal: A New Direction, announced by Deputy First Minister Ieuan Wyn Jones, makes a fundamental shift away from the day-to-day management of Welsh companies, often through grant giving, towards providing infrastructure and loans for business.

As well as building on successful sectors in Wales, the new strategy also looks to increase links with education, not only to improve skills, but also to involve Welsh universities in an expanded research and development role.

Bethan said: “Swansea University has been incredibly proactive in recent years in buildings all kinds of links outside of the campus. I work with a number of its professors and other staff, and I know they are incredibly eager to take the lead in providing R&D and other work which not only benefits the economy but also Welsh society as a whole.

“Some of the plans they are working up – for the Copperopolis site, for example – are uniquely innovative, acknowledging the importance of the past while providing skills and developing new technologies and ways of production that could make the Swansea area a leader in a number of fields.

“I’m delighted that the Deputy First Minister has recognised their value, and look forward to working with a newly-empowered Swansea University to play a full role in developing the economy of South West Wales and the rest of the country for the future.”

Some 700 former workers from the Swansea area are fighting to have their pensions restored after the receivers for Visteon UK applied to enter the Pension Protection Fund. It means that some of the pensioners, who number 3,500 across the UK, could lose as much as half their entitlements.

Bethan, who has helped to fight the case since Visteon UK went into liquidation on March 31 last year, said: “The pensioners’ union Unite believes it has a strong case against Ford, which it accuses of mis-selling pensions to its members. But while we are waiting for Unite to make a decision on going ahead with legal action, we cannot afford to stand still on this.

“I have told the minister – along with Ieuan Wyn Jones, the Deputy First Minister here in Wales, who has been incredibly supportive over Visteon, and the Pensions Regulator – that there are two specific incidents involving both Ford and Visteon that give me great cause for concerns and should be investigated further.”

Mike Gard, from Swansea and one of the Visteon pensioners, added: “The Visteon Pension Action Group has also written to the Prime Minister and the Secretary of State for Work and Pensions to press for a parliamentary inquiry. And, with the Pensions Regulator compelling a business for the first time to make a pension contribution after it avoided its liabilities, there seems to be a willingness to stop this kind of practice from happening.

“I hope the Pensions Regulator approaches its investigation into Visteon as vigorously as it has done in this case.”

Bethan added: “The National Assembly does not have the powers to investigate the collapse of Visteon – it should, but it doesn’t. So we need to push for a Parliamentary inquiry.

“It is crucial that the new Westminster Government realises that if it allows Ford to get away with what happened to Visteon UK, it sends a message to every less-than-scrupulous multi-national with an in-deficit pension fund that the UK is a soft touch. We cannot afford that – and we should not afford it.”

Last Tuesday, Environment Minister Jane Davidson AM released a statement on planning for renewable energy yesterday, in which she once more committed her administration to its Low Carbon Energy Policy Statement.

Within that statement, the Welsh Government pledges to seek out “low carbon energy production via indigenous (and thus secure) renewables”.

Bethan asked Elin Jones AM, the Rural Affairs Minister: “Does the Minister agree that if it would take the current entire biofuel output of the US to power the proposed Prenergy plant in Port Talbot – which is agreed – then Wales really does not have enough land to achieve the Welsh Government’s low carbon commitments through biomass, and that we should instead seek carbon neutral options?”

Ms Jones agreed that Wales only has land to plant biofuels for “small scale” plants, and answered that sites such as Prenergy would have to source from abroad.

Bethan said: “And therein lies the issue. On the one hand, the Welsh Government is committed to ‘indigenous’ renewables, yet it concedes that universally unpopular schemes like the Port Talbot application would have to rely on biofuel from overseas. Also, the developer for the schemes at Kings Dock in Swansea’s SA1 and Coedbach, near Kidwelly, now the subject of a public inquiry, has said it intends to source 75% of its fuel from imports.

“Of course, if it is being transported by ship, the reduction in carbon output achieved could be negligible, once again shining a light on the highly questionable benefit of biomass. I sincerely believe we will look back in 50 years and wonder why on earth we ever considered it as a renewable, particularly as there are indigenous, carbon neutral – not just low carbon – solutions here in Wales.

“I think it shows the farcical situation where the local democratic will is overwhelmingly against biomass plants, yet decisions on the large stations – the worst stations – cannot be made here in Wales. I shall be pressing ministers here to push the new Westminster government for powers to decide on power stations producing over 50mw. It is our right.

“And I am saying to the Welsh Government – for pity’s sake, let’s call a day on this technology. Let’s see if we can halt these schemes while they are assessed against new policy. Nobody wants them, so let’s concentrate on something that will work, and will bring clean air and jobs to Wales.”

Pete Wilson, from the Prenergy opposition group PT-RAPS, added: Importing wood on the scale required to fuel the 1GW of biomass schemes planned for Wales, such as Prenergy, Kings dock, Coed-bach and Anglesey developments is widely recognised as being unsustainable. It is now essential that the Welsh Assembly call time on all projects that are being vague about the sourcing of their wood fuel from abroad and this effectively means all the aforementioned schemes.”

The £2.4 million NSA STRIDES Alliance (Sustainable Training Initiative Developing Employment Skills) initiative announced today (TUE) aims to boost the confidence of economically inactive and unemployed people in the county, helping them achieve the ‘can do’ mindset needed to secure a job.

Led by the New Sandfields Aberavon or NSA charity as it is now known, the project is backed with £1.5m from the European Social Fund through the Welsh Assembly Government – and will help people tackle barriers such as lack of motivation or low self esteem that prevent them from getting a job.

Bethan said: “I am pleased that the Welsh Assembly Government has decided to back the NSA charity in the invaluable work it does in helping the unemployed and other disadvantaged people in the area. Neath Port Talbot faces considerable challenges in this regard but NSA is meeting them head on.”

Deputy First Minister Ieuan Wyn Jones said: “One of the key commitments of our One Wales programme of government is to ensure people can fulfil their full potential, find work and contribute to the prosperity of their local communities.  This project is a good example of how our management of European Structural Funds is supporting people to overcome a range of disadvantages – and at the same time helping Wales put the recession behind us.”

Ian Isaac, Chief Executive of NSA said: “NSA STRIDES Alliance is designed to engage economically inactive people where they live. The organisation will wrap itself around the scheme utilising community assets, ensuring that leadership, administrative and management skills and experience retained from a previous STRIDES scheme will be put in to practice. Over the next three years we will support over 800 people in their journey towards higher self esteem, confidence, acquiring the skills and abilities to gain and regain entry to meaningful employment.”

Can the weatherman tell us which way the wind is blowing for Welsh media?

New Culture Secretary Jeremy Hunt has finally brought an end to plans for Independently Funded News Consortia pilots in Wales and elsewhere, which would have provided multi-media news delivery in place of ITV.

 

 

The issue was debated in the Senedd on March 17 this year, and this is what Bethan said during that debate:

At this time in Wales, no one – and I mean no one – knows what sort of media provision we can expect in the future.

The Government is pressing ahead with IFNC pilots, regardless of the Digital Economy Bill. The deadline for bids has passed and we are expecting pilots to be awarded by May (note: UTV was the successful bidder in Wales).

The Tories would scrap IFNCs and introduce up to 80 local media companies (LMCs), incorporating televised, online and printed content, based along the model of local US TV stations. Or – as Alun Cairns AM’s amendment suggests – they might prefer the status quo.

There are practical and economic reasons why LMCs won’t work. The first is available spectrum bandwidth for broadcasting. There simply isn’t enough of it to maintain a network of independent broadcasters in Wales.

Geographic interleaved spectrum is offered as the answer, but the fact is that there isn’t enough of it to cover anything other than a few parts in Wales. Even by the most optimistic estimates, perhaps one third of households won’t be able to receive it, and most of the rest who might be technically able to won’t in practice, because private investment in very local TV won’t happen on its own.

The best we could expect out of an unsubsidised route is one or two local stations featuring old, purchased content, because the cost of acquiring the spectrum is as nothing compared to the costs of creating content. Where will this money come from?

So without public funding – which the Tories are opposed to – this idea is unlikely to get off the ground. In addition, US broadcasters estimate that the minimum reachable audience required to make a local television network commercially viable is comparable to a city the size of Cardiff. Since our capital has the largest and densest population concentration in Wales, this idea becomes commercially unfeasible across the rest of Wales.

Local TV has been tested elsewhere in the UK, but the US affiliate model is considered unsuited to the UK, let alone Wales. When Guardian Media Group sold GMG Regional Media to Trinity Mirror last month, its loss-making Greater Manchester television station Channel M was excluded from the deal. Today it is being reported that 29 of 33 jobs there are being cut, effectively closing the station.

Why would the private sector rush to invest in this model? Alun (Cairns AM) suggests deregulation. Would this mean cross media ownership? Wales has suffered from almost a generation of under-investment in its non-publicly owned media, as news organisations have maximised profits to previously unimaginable levels by stripping resources to the point where their products have become less and less attractive to consumers, evidenced in falling circulation and viewing figures. This would only reinforce current issues with the Welsh media.

Innovative technology may reduce costs, but does anyone here believe it will be enough to allow this proposal to flourish and – more importantly, for the Tories – turn a profit?

This Tory amendment also suggests that maintaining the status quo might be preferable to IFNCs. This is not possible. The IFNC pilot isn’t a new subsidy for providing TV news in Wales. ITV’s service has always been subsidised, but up until now that subsidy has been in-kind, with access to spectrum in exchange for public service obligations. This spectrum subsidy in Wales will go completely on March 30th when the Wenvoe transmitter completes the switchover. What happens then? Does the programming it supported merely go away, or do we in effect replace the in-kind subsidy with real funding?

However, this is all just a discussion of process, not ambitions. What is important is that with these IFNCs, we have the opportunity to grow a strong, Wales-centric news organisation, delivering content in a modern way, which will serve Wales better as it moves towards autonomy.

With Trinity Mirror already closing bigger titles than the Western Mail, we cannot rely on media businesses to cover the devolved polity, nor should we feel comfortable leaving it all to the BBC.

This isn’t about us getting our mugs on telly – it’s about decisions that are made each and every week about public services, the economy and the environment, being reported so that people can properly hold their elected representatives to account.

Ofcom research shows that people in Wales are aware of this potential deficit – that’s why they support the retention of plural TV news and non-new programming far more than people in the English regions.

I have spoken with people involved in all three of the Welsh IFNC pilot bids. While what they are offering varies, one thing they share in common is enthusiasm for this project. They see the possibilities, and I think they should be given the chance to achieve them.

There is an appetite for this change – on both sides of the television screen.

After yesterday’s announcement, Bethan had this to say:

“Tory proposals for addressing the media deficit here in Wales have never been viable, and Jeremy Hunt’s announcement does nothing other kick the whole issue into the long grass. I appreciate the need to make savings as well as roll out broadband, but Tory proposals for City TV stations have never been workable, and you don’t need an expensive investment banker to tell you that.

“Just look at Channel M, in Manchester. Properly resourced via the Guardian Media Group and available to a metropolitan area of over one million people, it nevertheless failed to succeed. US models, which the Tories admire, are considered unviable if the audience is below 350,000 people. That means nowhere in Wales other than Cardiff.

“I met with Michael Wilson, head of the UTV bid, on a number of occasions, and was genuinely excited by the plans the station had for Wales. If anything, such a solution is all the more urgent in Wales, which has always suffered from topographical and demographic issues where news dissemination is concerned, and must now add an economic crisis and changing media tastes to years of chronic underfunding.

“To that end, it is more important than ever that the Assembly considers seriously the establishment of a media forum, first proposed by the NUJ and which I am currently pushing, to bring employers and staff together to look for innovative, home-grown solutions to issues facing the Welsh media.”

 

 
- Read more about this decision on Rob Williams’ new blog  over at The Independent

Bethan Jenkins led a short debate on the Visteon pensions crisis today in the Senedd. This is what she said:

I’m going to start this debate with a story.

One day, a mouse chanced upon a farmer and his wife setting a mousetrap. Very alarmed, he immediately ran off to tell the other farm animals.

The chicken raised her head and said: “Mr Mouse, I can tell this is a grave concern to you, but I can’t be bothered by it.”

The pig sympathized, but said: “I am so very sorry, Mr Mouse, but there is nothing I can do about it.”

The cow said, “Mr Mouse, I’m sorry for you, but it’s no skin off my nose.”

So, the mouse returned to the farmhouse, dejected, to face the farmer’s mousetrap alone. That very night, the whole farm woke to the sound of it snapping shut.

The farmer’s wife got there first, but in the darkness she couldn’t see it was a venomous snake with just its tail caught in the trap, and it bit her.

When she returned from hospital, she still had a fever. The farmer knew the way to treat it was with chicken soup, so he grabbed his hatchet and slaughtered the main ingredient in the farmyard.

But his wife’s sickness persisted. Friends and neighbours came to sit with her. To feed them, the farmer butchered the pig.

Sadly, this care wasn’t enough, and the farmer’s much loved wife died. So many people came for her funeral that the farmer had the cow slaughtered to provide a feast for them.

The moral of this tale? When someone is in trouble, it could mean that we’re ALL in trouble.

——————————–

This story was sent to me by one of the men from Swansea who once worked at the Visteon automotive factory. One of the 700 workers from that city, and one of over 3,000 men and women across the UK who are fighting for what is theirs, and what has been taken from them in one of the most shameful moments of callous corporate chicanery in modern British industrial history.

Because of what has happened to those pensioners, I believe that the time has come to decide – as an Assembly, as a country and across the Western world as a whole – whether Visteon is the last time we stand for such breathtaking free market disregard for working people, or whether the way in which these men and women have been sold down the river by one of the world’s most recognisable and loved brands becomes just the first of many, many more depressing episodes.

In short, we need to decide where to draw the line, how to take back the power from these corporations, and reaffirm our persistence in providing the duty of care we have promised to the people we represent.

This Assembly may not be aware of recent developments concerning the Visteon pensioners. The Visteon Corporation – parent company to Visteon UK – is seeking Chapter 11 reorganisation in the US, which will effectively allow it to shake off much of its debt and start anew.

While this was being heard in the courts, the Visteon UK pension fund trustees, with the support of the Pension Protection Fund, entered a claim for around £350million – the amount by which the Visteon UK pension fund was underfunded.

In the US, Ford assisted Visteon in meeting its pension obligations in order to allow the company to emerge from bankruptcy. Visteon Corporation lawyers have issued a near-250 page objection to the UK claim that can be whittled down to the following points: 

• Allowing the claim would have a dramatic impact on the corporation’s ability to pay other creditors – and UK pensioners would receive their money first;
• That under UK law, the corporation has no obligation to the Visteon UK pension plan because it is no longer its sponsor;
• That any judgement made in the UK against Visteon is unenforceable, because it cuts its ties with the UK when it went bust;
• Lastly, that the Visteon Corporation subsidised its UK operation “to the tune of almost $800million” during the nine years it was in existence, and received no benefit in kind.

I want to concentrate on the final point by looking at the history of the Visteon Corporation.

Faced, at the turn of the millennium, with mounting component prices and with ever-more available cheap labour in emerging economies, Ford spun its parts division out of the main business.

Until Visteon was formed in 2000, components had been paid for in what was referred to by Ford as ‘wooden dollars’ – the transfer cost between Ford divisions which was built into the price of the car. Now, however, it had created an internal market. Visteon was Ford’s main supplier and supplied only Ford in the first year. Visteon workers – including the 3,500 based in the UK – were given iron-cast guarantees by Ford that their pension plans and terms would be transferred over to Visteon and mirrored by the new business. All of this is a matter of record. Ford finalised with trade unions a clear agreement on the transfer as part of the Ford European Works Council.

What only became apparent much later on was how Ford had effectively set up Visteon to fail from the start. It insisted that its labour costs were locked into the transfer agreement, but Ford had committed Visteon to matching competitive prices on all its product range within five years.

This is known as ‘the China price’. Suppliers are told to get their prices down to those of emerging economies and the Third World – where there are no final salary pension schemes, just appalling pay and even worse conditions – or lose the trade.

Visteon ended up selling its products to Ford for 30% less than it had expected to. By 2006, Visteon UK’s costs for materials, labour and overheads were 113.7% of revenues. In its nine years of existence, Visteon UK never made a profit. Instead, it lost $955million – or $500,000 every working day Visteon UK operated.

From reading the objection, you might surmise that Visteon UK was a basket case in isolation. Not so. In 2005, Visteon offloaded 17 unprofitable plants and six offices – many of them in the US (although Ford yesterday announced it is investing $32 million in a plant Visteon handed back to it). The following year, Visteon delisted from the New York Stock Exchange after its share price dropped to two cents.

Not all of this was Ford’s fault. Pensions at Ford were 120% funded, although when this moved from Ford to Visteon, it dropped to just 80%. It took Visteon three years to start contributing. In addition, Visteon UK allowed many long-serving former Ford employees to retire early – presumably so it could employ new staff on lower wages and less advantageous entitlements.

This meant that by March 31, 2008 – a year before Visteon went bust and fired its workforce with six minutes’ notice – the UK pension scheme had 3,131 members and just 618 contributors, a ratio of 0.2 active to one retired, compared with 11 to one just six years before.

Of course, the Visteon Corporation received benefits in kind, despite what it claims. It couldn’t manufacture a particular driveshaft at any plant on earth other than Swansea. It had tried, and failed. That’s the real benefit of a highly skilled and properly remunerated workforce – not that either Visteon or Ford seemed to care.

Sensing that the game was up, the two colluded in what was known as Project Kennedy – duplicate resourcing and stockpiling so that Visteon UK could be closed without any disruption to Ford’s output. It is worth noting that even though over 500 men were made redundant on March 31 last year, Ford lost not one single day of production.

The expertise and benefits it claimed not to have received from the UK were hived off to a new business, Visteon Engineering Services, with a new pension plan. It is here, at the company’s headquarters in Chelmsford, that you will find Visteon UK’s former senior officers, the architects and executioners of a plan which, while not illegal, was certainly duplicitous and morally inexcusable, seeking as it did to deceive men and women who had never done anything other than work hard for many years for Ford and Visteon.

If the judge in the US decides to refuse Visteon Corporation’s objections and winds up the company, it is quite possible that production at Ford would be considerably disrupted, to the point where it might well be more sensible for it to put its hands up and agree to sponsor the Visteon UK pension fund, as it has already done so for US Visteon workers. The cost for doing so would be limited to around £15 million per year.

This step would also avoid possible legal action by Unite, the Visteon pensioners’ union, which has apparently agreed to take the corporation to court to demonstrate that it reneged on pension guarantees when it spun Visteon out of its core business.

That would be the easy route. So far, Ford and Visteon remain trenchant in their opinion that they have done everything that they could to support Visteon UK pensioners, and no doubt they will have to be dragged kicking and screaming into court, too. Ford continues to describe the situation as “unfortunate”. Losing a button is unfortunate – being robbed of a lifetime pension after such clear commitments from an employer like Ford is a tragedy, and a tragedy affecting all the employees that transferred to Visteon.

It’s hard to follow Ford’s thinking. I can’t pretend I understand the company’s spending priorities, but only yesterday it reported quarter 1 profits of $2.3bn for 2010, a six-year high. Its shares are at a five-year high. It plans to increase production by 9% this year, and expects to remain profitable throughout the rest of this year.

Sponsoring the UK Visteon pension fund would not amount to even one percent of its quarterly profits.

At the present time, the Visteon pension scheme is being assessed for entry into the Government’s pension ‘rescue’ process, The Pension Protection Fund. The Visteon management may have seen the failure of the pension fund as simply something to be picked up by the PPF and may therefore have acted with less care towards it. The pensions regulator is investigating.

The overriding concern for Swansea Visteon employees is the long term security of the PPF as payments are already as much as 40% lower than the Ford Visteon Scheme. Those payments could be reduced at any time, or the fund could be closed altogether.

But there is a wider question over how corporations take advantage of schemes for employment, and can be compelled to fulfil their obligations when they close factories.

And this is an issue for this Assembly. Pensions are a matter for the UK government, while the trustees, the PPF and Unite are doing what they can to seek redress for these workers. I have to say that I haven’t seen much from the Government – from the Welsh Secretary nor the Pension Secretary – that convinces me that it is at the pensions regulator’s back over Visteon. Sure, we’ve had a few letters fly about, and a number of robust denials, particularly from Peter Hain, that he is doing little to help the pensioners. But you don’t sense the urgency – the prioritising – from UK Government ministers.

This has become a bit of an issue for me, because ministers here rightly say that they have no relevant devolved powers. They have asked their UK counterparts to take up the issue, but there is only so much leading to water that the Welsh Government can do.

However, there is a wider debate to be had about what kind of company we want here in Wales. Of course we want the Fords of this world to come to Wales. Such companies provide highly-skilled, well-paid work that filters out into the wider Welsh economy – albeit too often on a sliding scale.

We need to get past the myth that local suppliers do well out of such big companies. Ford in Bridgend sources most if not all of its parts abroad. This is crucial because, if we are to have a grants structure that awards funding to companies that come to Wales, it should be paramount that those businesses continue to benefit our economy over a meaningful period, that they become drivers through the use of our money, that those benefits continue to ripple further outwards.

Of course, none of us can guess future economic movement, and in giving grants we are taking the same kinds of risks as those in the private sector. But we must be mindful of the long term. And we must ensure that we look past the prestigious name and examine instead the track record of these blue chip corporations and decide whether they can bring sustainable advantage to the Welsh economy, or if they are simply benefitting themselves in the short term.

To do anything else would only assist in concentrating the wealth in the hands of a very small group of executives. Executives that very rarely live in or care about Wales.

They are not our concern. We are charged with the welfare of our constituents. Can we really shrug our shoulders and allow former workers in Wales – men and women who have retired – to sell their retirement homes and return to the workplace?

Can we really stand by and leave them to the possibility of many uncertain years ahead, when they are at the time of their lives when they should be enjoying the fruits of their labours?

Should we not do all we can when we have workers, some of whom only spent six months with Visteon after 40 years with Ford, that now have nothing?

And can we really allow our economy to be played like a Stradivarius by callous opportunists who take what they can and then expect the Welsh Government – and, by extension, the Welsh people – to sweep up their mess?