MG Rover Survey Report

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					MG Rover
Survey Report
Executive Summary
•   The closure of the MG Rover Longbridge site resulted in the loss
    of 6,000 jobs across all the bargaining groups.

•   80% of the workforce were over 40 years old and half had over
    21 years service.

•   66% of workers have found alternative work, 11% are either
    retired or on incapacity benefit, and 23% are still looking for work
    or on a training scheme.

•   Of the 66% of workers who have found other jobs less than half
    are employed in manufacturing.

•   20% of workers are now earning the equivalent of the minimum
    wage, a significant reduction on the wages that were earning at
    MG Rover.

•   15% of respondents said their age was one of the main factors for
    not being able to find new employment.

•   A significant number of Amicus members said they were very
    dissatisfied with the support offered by the Government and other
    agencies. This view is supported by comments in the report on
    MG Rover from the Committee of Public Accounts.

•   There was no provision for financial support for workers who
    wanted to re-train but could not afford to due to financial and
    family commitments.

•   Half of all respondents said they had attended a meeting with a
    skills advisor but only 31% were given an individual training plan.
    This figure is much lower than the 58% quoted in the National
    Audit Office Report.

•   41% of respondents said they had gained a new qualification to
    help them to further their job prospects or to gain employment.

•   The closure of MG Rover did not impact as significantly on companies
    in the supply chain as had been envisaged. They saw what was
    happening with the company and modernised and diversified their
    product range to reduce their dependency on MG Rover.

•   Amicus is concerned that evidence shows that collaboration and
    communication between the various agencies involved were far
    from robust and pragmatic, they did not deliver an efficient and
    supportive service to workers who were significantly traumatised
    by the MG Rover closure. Amicus hopes that this situation
    is never repeated.




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Introduction
MG Rover1 went into administration on the 8th April 2005 when the
proposed deal with the Chinese company Shanghai Automotive Industry
Corporation (SAIC) collapsed and the company did not have sufficient
cash to continue trading. The Department for Trade & Industry (DTI)
provided a loan of £6.5 million to the administrators to sustain the
business for one week whilst attempts were made to sell the company
as a going concern.

The subsequent closure of the Longbridge site in the West Midlands
on 15th April 2005 resulted in the direct loss of almost 6,000 jobs with
further job losses amongst suppliers and former dealers over
subsequent months.



Objective
The main objective of this project was to monitor what happened to
the workforce following the factory closure. The intention was to see
where the redundant workers were re-employed in terms of industry,
location and quality of jobs offered, as well as the terms and conditions
of their re-deployment. We also wanted to see how many had not
managed to find other work, how many had entered training and how
our members had found the whole process of losing their jobs and the
collapse of the company.



Methodology
Amicus carried out postal surveys and interviews of the individual
Amicus members affected by the collapse of the company. The initial
survey questionnaire was sent to 1750 amicus members during
August 2005, the aim was to establish a profile of the workforce
and to monitor the progress made in finding new employment
and training opportunities.

Subsequent surveys were used for ongoing tracking of the progress
made by the former MG Rover employees, additionally these were
also used to monitor the advice, guidance and support given by the
government agencies.




1 MG Rover comprises MG Rover Group Ltd and Powertrain Ltd.


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Profile of the workforce
80% of the workforce were over 40years old, and half of them had over 21 years of service
with a further fifth having 16 – 20 years of service.



                                            Age




                                   Length of service




The average basic wage was around £22,000 per annum with salaries at the top end of £50,000
and the lowest grades earning £12,792 p.a. With overtime and shift premiums the earning
potential for individuals would be far greater than the basic pay figures.




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    Our latest survey carried out in August 2006 showed that 66% of the former workers at
    MG Rover had found alternative work, 11% have either retired or are in receipt of incapacity
    benefit, leaving 23% unemployed either looking for work or on some kind of training programme.



                                       Employment Status




    Of those that have secured work in the last 18 months less than half are employed in
    manufacturing with 20% working at a wage rate equivalent to the national minimum wage,
    this is significantly lower than the rates of pay they would have been earning at Rover. In finding
    new work many people have to travel significantly greater distances to and from work
    (over 50 miles each way in some cases).

    15% of respondents cited their age as one of the main factors for not being able to find new
    employment. This is a major concern taking into account the demographics of the former
    employees, hopefully the new age discrimination regulations that came into effect on the
    1st October 2006 will address this problem that many people face.



                                                Sector




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In response to the question “In the event of production re-commencing at Longbridge, would
you consider going back?”, two thirds of those questioned said they would. This probably
reflects the nature of the alternative work which many have had to take and the drop in
earnings which whole families have had to cope with. Amicus would also say that the work
many of our members were doing was highly skilled and of high value, making them feel
valued and confident in their work.




                                  Would You Go Back




The government pumped significant funds into the area to assist workers to rebuild their lives
co-ordinated by the MG Rover Task Force. The Task Force ended its role in March this year and
the work is now undertaken by the Regional Development Agency. Comments by a number
of the Amicus members responding to our survey indicated a dissatisfaction with the support
offered by the government and its agencies and this is borne out by comments in the
Committee of Public Accounts Report on MG Rover published in July this year which
acknowledged that training course were not available as quickly as they were needed and
that neither the DTI nor Advantage West Midlands had set targets for the rate at which
former employees would find jobs or the permanency or quality of those jobs.

Training provision and guidance was also heavily criticised by our respondents, many being
forced to take low paid unskilled jobs as they could not manage to support their families on the
low benefits offered whilst carrying out re-training programmes. One respondent suggested
that “there should be a student loan type system, so they could continue to receive a good
wage whilst being trained and this could be repaid once qualified and in suitable employment”.

Several of our respondents became disillusioned with the services offered from Job Centre Plus
(JCP) and Learning Skills Council (LSC) and many believed the information and communication
process was poor and in some cases inconsistent.




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     Around half of our respondents said that they have had a meeting with a Skills Advisor, of
     whom only 31% were given an individual training plan. This figure is much lower that of the
     58% quoted in the National Audit Office Report, this may be reflected in the profile of our
     members being highly skilled professionals.



                                   Individual Training Plan




     We also asked respondents if they had gained any new qualifications since being made
     redundant and 41% of respondents said they had. However a number of respondents said
     employers were unwilling to re-train as they did not get financial assistance for this



                                      New Qualifications




     At a time where skills and training are of crucial importance Amicus would have been keen to
     see more workers enabled to re-train. It was obvious from comments made by our respondents
     that the financial implications of re-training were untenable when trying to pay a mortgage
     and support a family.


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Summary
The collapse of the company was traumatic to the workforce and had a devastating effect
on the local community and throughout the supply chain including the dealerships
around the country.

The impact of MG Rover’s closure on former suppliers has been less than originally expected,
this is probably due to the fact that many supply companies saw the way the market was
shifting and took the decision to reduce their dependency on MG Rover and to modernise
and diversify their product range, following BMW’s decision to dispose of MG Rover
in the year 2000.

Following the closure and the sudden scale of job losses many of the various agencies struggled
to cope with the immediate crisis. Fortunately many lessons have been learnt that hopefully
will assist any future job losses that may occur throughout the industry and the UK.
Amicus would be loathe to see this situation happen again on this scale.



Recommendations
It is essential that collaboration between the various agencies like Jobcentre Plus and LSC are
robust in order to provide a tailored package of support that can be delivered in an effective
manner taking into account the needs of individuals.

It is not often that we see companies collapsing in the manner that MG Rover did although
we are still seeing the demise of certain industries and continue to witness work being sent
to other countries at the cost to the UK worker. The absence of a level playing field and the
weakness of employment protection leave the UK worker vulnerable when global companies
consider restructuring and cost reduction.

Companies should be compelled to invest in skills and innovation by providing appropriate
training to ensure they have a highly skilled flexible workforce that can lead to improved
efficiencies and increased productivity. The recent Leitch Report 20062, reiterates Amicus’
view of skills and training as an imperative, but lets the UK workforce down by leaving the
provision of training by employers as a voluntary arrangement until 2010. This arrangement
will then be reviewed and if it is not working a compulsory scheme will be introduced.




                                    For further information please contact
                                        Graham Cain, Research Officer
                         Amicus the union, 33-37 Moreland Street, London EC1V 8HA.
                     Telephone: 020 7780 4019     Email: graham.cain@amicustheunion.org



2 www.hm-treasury.gov.uk/leitch


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