Ford and Visteon UK Ltd

Jim Shannon Excerpts

Thursday 12th December 2013 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

I come to this debate with mixed feelings. I feel grateful to you, Madam Deputy Speaker, and to Mr Speaker for allowing us to have this great debate in the mother of all Parliaments, from where it will be transmitted across the pond to the United States, where Ford’s ears will be pricking up, as will the ears of Ford’s consumers, who will be thinking twice about whether the Ford brand is whiter than white when they choose their next car.

I am grateful to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) and others for the work they have done with me to keep this show on the road and to keep up the pressure on Ford. Ford might have thought that, after the early rumbles of protest, the noise would die down to a whisper. Instead, we are turning up the volume, and the lion’s roar from Britain will be heard in the United States today and in the future.

I am also grateful to the Visteon workers who are with us today, up in the Gallery, and to the many others who have come here on coaches at other times and who continue their fight in London, Cardiff, Essex, Liverpool and Northern Ireland. They continue to demand justice in all corners of the United Kingdom, and that demand is echoed today in all corners of this great Chamber by all the parties.

I come here with sadness as well. My hon. Friend the Member for Aberavon (Dr Francis) mentioned the fact that Ford came to south Wales in 1964. At the time, my father was heading up economic development in the Welsh Office, and he was critical in bringing Ford to south Wales. He is no longer with us, but I remember his story about the chairman of Ford turning up at the Welsh Office in Cardiff in a green Rolls-Royce—believe it or not—to talk about the arrangements and inducements to get Ford to the area. That was more than 30 years ago, and perhaps Ford had a different outlook and a focus on wider communitarian values in those days.

So I come to the debate with thanks and with sadness, and also with a degree of frustration and anger that we find ourselves here. We have been engaging with Ford UK, and it has been forthcoming in engaging in dialogue, but its hard-nosed American bosses, sitting in their directors’ boardroom, seem to think that this issue will just go away and that the workers of the UK can be treated as some kind of offshore group of people that they can forget about. It has been mentioned that many of the people who have suffered are now dead, and I believe that Ford is hoping that the issue will go away. I and other Members from all parties say this: “Ford, you can run but you can’t hide from your responsibilities. We will continue to fight for our constituents, year after year, until this matter is resolved.” Madam Deputy Speaker, you mentioned that this matter was before the courts and that decisions have yet to be made, but we are talking not about the legalities of the case but about moral responsibility and the duty of care that should be shown by this multinational towards its employees, in respect of pensions in particular.

Members will know that I introduced the Multinational Motor Manufacturing Companies (Duty of Care to Former Employees) Bill, which covers this ground, but the Minister might also wish to comment on the big conversation that is taking place between the global multinationals, sovereign states, workers and consumers. There have been debates in this House about the responsibility of multinationals, be it Amazon, Google or Vodafone, to pay their fair share of tax. Vodafone had the biggest share transaction in history, or at least this century, involving £53 billion, but not a penny was paid in corporation tax. How are we going to re-orchestrate things with other countries to ensure that global corporations are not globe-trotting away from their responsibility?

That is a bigger conversation, and I know that people are engaged on the tax side of it, but its other side is the fair treatment of workers. We have heard reports, for instance on “Panorama”, of what Amazon is doing, and I am following through on that, as it is a local company in my constituency, too. As with Ford, we are talking about big companies that provide big employment and are crucial to all our towns and cities, but that does not mean they can run away from their responsibilities on fair tax, fair play and the fair treatment of consumers and workers, be they current, previous or future.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) on bringing the matter to the House for consideration. I have been told by one Belfast worker that the workers

“rights were guaranteed not for the lifetime of the Belfast plant, but for the working lifetime of the individual workers. Therefore, their redundancy rights were guaranteed for as long as the workers remained employed, and their pension rights were guaranteed until they reached retirement age”

and beyond. We can understand the anger of those workers and their disbelief and dismay at what took place. Is it not time that the big company in America stepped up to the mark and paid out?

[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.