Boots made for walking
Does this sound familiar? A household brand with a long established link to a hard-pressed Scottish town suddenly tells its workforce that it's closing down within two years, and moving production east at a cost of about 900 jobs.
National and local politicians are incensed that they were not warned, and take a public revenge on the company. But the closure goes ahead anyway.
What's happening in looks uncannily like the story of Boots in Airdrie, where Soltan sun care lotions and No 7 products used to be made.
The high street chemist announced in February 2003 that
The most incensed politician back then wasn't in the Scottish Government.
It was the then Secretary of State for Scotland, one Helen Liddell, who was also Labour MP for Airdrie and Shotts (until two years later when she became Britain's High Commissioner in Australia).
So does that experience hold out any lessons for how to steer Kilmarnock, Diageo, East Ayrshire Council and the Scottish Government through the next few months?
Some interesting answers to that question come from a study of the Airdrie process carried out by the Scottish Council Foundation think tank.
Dusting it down, it shows much of the workforce was never reconciled to the reasons given for closure of its cosmetics plant - over-capacity rather than under-performance.
There remained resentment that the company didn't offer other options or seek voluntary redundancies before going for closure.
"Not even the smartest communication strategy could have bridged the cap between the company and the workforce at this stage," says Jim McCormick's report.
"In any such closure, it is likely that an initial period of antagonism between the company and employees will occur, with trade unions, politicians and much of the media backing employees."
With workers guaranteed wages up until closure days, there was an incentive to take that cash and find other work while they could.
The report recommends enhanced payments for those who stay with the company until the final closure.
There were five stages of redundancies over the two years of closure, with Boots managers believing this would be more responsible.
Yet nearly half of employees said they felt the extended period had made the situation harder.
Support for workers to get new jobs or retrain was seen positively by staff, with most saying they gained from using the Next Move Centre.
But the report offers two suggestions: more information on self-employment, and more effort to help older workers retrain, recognising they may be more discouraged than others.
By tracking Boots workers over the next two years, the Scottish Council Foundation found about half secured similar or better jobs elsewhere, and about half experienced worse jobs, particularly in pay rates.
This was during the economic good times, which is not what Kilmarnock workers face.
"Some of the more pessimistic expectations on long-term job losses and damage to the local economy do not appear to have been borne out... and did not result in significant flows into long-term sickness/incapacity or early retirement as may have been expected in recent decades."
One crucial point of relevance to Kilmarnock was that Boots donated £3.6 million from the sale of its factory land to the regeneration effort that accompanied its departure.
Another £250,000 went into Airdrie Business Centre, and £100,000 into projects to help workers retrain or find new jobs.
The land was used in the boom years to build housing and a primary school.
That seems to be where Scottish Government thinking is heading in Kilmarnock, judging by the detail with which Finance Secretary John Swinney addressed the future value of the Johnnie Walker plant.
Local Labour MP Des Browne has also served notice his intention now is to squeeze the most out of Diageo as it departs his constituency.
The drinks company has said it wants to a leave a legacy (other than unemployment) and is open to ideas.
But there's a final warning for Diageo, East Ayrshire Council, Skills Development Scotland, the Scottish Government and anyone else who counts as a "stakeholder" - don't expect any thanks.
Tracking staff opinion as Boots pulled out of Airdrie, it concluded "none of the key stakeholders should expect to earn much credit from former employees".
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ³ÉÈË¿ìÊÖ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 11th Sep 2009, Dean MacKinnon-Thomson wrote:Redundancy is the cold face of recessions. Some firms genuinely cannot cope, other use the recession as an opportunity to restructure, sack with relish.
In short there is little that can be done, but if companies such as Boots do donate millions towards regenerating the land where their factory used to stand, surely this is to be welcomed?
You say "Boots donated £3.6 million from the sale of its factory land to the regeneration effort that accompanied its departure" Douglas, this is the hallmark of a responsible firm. Which takes its obligations to the local community seriously.
If only Daigio would do likewise, and take their responsibilities seriously; so that even if closure is inevitable (in their pursuit if ever higher profits) - they at least respect the local community they are hurting.
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Comment number 2.
At 11th Sep 2009, redrobb wrote:Re- Boots (Airdrie) I think we have two former employees now working with us, dinnae ken where the other 498 ended-up. But hey-ho the incensed politician that went doon-under still had a highly paid joab furra life though! Kinda like the those that have been speaking out about Diagio etc, did I also not hear that USA firm moving out of Livingston with the loss of 500, I'm quite sure another of those lifer politician's is also pledging (words) not money to seek some sort of management buy-out. Ah but then words are so cheap, laterally speaking that's what many perhaps think of these so called captains of politics!
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Comment number 3.
At 11th Sep 2009, nine2ninetysix wrote:This is an interesting report on the outcome of Boots.
If asked, how many of us could have cited Boots as a forerunner of Diageo? I remember it now but only when prompted, I suspect that will, in time, be the case with Kilmarnock and Diageo.
Speaking from experience, having been thrown on the scrapheap twice, each time by very successful and profitable British multinationals I know the fear, anger, resentment, and perhaps even relief that will be facing those at Kilmarnock.
I know also that offers of help are not guarantees of success and I have had good times and bad over the last decade or so.
The most important thing is not to dwell in the past and be consumed by anger and resentment. Instead, focus your efforts on the present and the future, concentrate on what is essential rather than desirable and above all be flexible.
The jobs I have done since my first trip to the scrappie are nothing like what I did for over a quarter of a century but they have all put food on the table and in over forty years I have only ever signed on for benefit for a couple of months.
I am happier now than ever before due to my own efforts and the support of my family. Employers, politicians and trade unions are about as much help as the proverbial chocolate fireguard at times like these.
I sympathise with those faced with unemployment now but the future is in their own hands.
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Comment number 4.
At 11th Sep 2009, Dean MacKinnon-Thomson wrote:"That seems to be where Scottish Government thinking is heading in Kilmarnock, judging by the detail with which Finance Secretary John Swinney addressed the future value of the Johnnie Walker plant.
Local Labour MP Des Browne has also served notice his intention now is to squeeze the most out of Diageo as it departs his constituency.
The drinks company has said it wants to a leave a legacy (other than unemployment) and is open to ideas."
Well this is to be welcomed, if the firm does wish to leave a better legacy then it should be encouraged to do so. It is vital that th firm pays some financial contributions into the community.
It ought to mitigage some of the worst effects of closure, unemployment on the communities.
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Comment number 5.
At 12th Sep 2009, kaybraes wrote:When did responsibility to the community become part of company business ? The fact they've been there for so long has meant an enormous contribution to the local economy, far more than any gesture liable to be extracted from them now by the posturings of polititians.Companies are in business to make money, not to provide social services; this is the province of the very polititians who allowed the economy to collapse and thereby hastened the demise of a viable employer ; now they try to shift the blame and responsibility to the company their incompetence has destroyed in the hope they can claim some credit for any largesse handed out by the departing employer.Meanwhile the redundent workforce, after an initial blitz from polititians and a useless job centre will be left to plough it's own lonely furrow.
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Comment number 6.
At 12th Sep 2009, Dean MacKinnon-Thomson wrote:"Companies are in business to make money, not to provide social services;"
True, however to remove the social responsiblity aspect from commerce and industry is to invite desaster, just loo at the current recession.
We need more responsibility, socially awares firms, and better pan-economic regulation; not less. Banking and finance is proof that the solution is to have politicians actively promote a sense of social responsibility in the nations employers.
This is peoples livelihoods afterall.
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