Austin Rover (Redundancies)

– in the House of Commons at 10:58 am on 30th January 1987.

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Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill 10:58 am, 30th January 1987

(by private notice) asked the Secretary of State for Trade and Industry if he will make a statement on the redundancies announced today by Austin Rover.

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The call for voluntary redundancies and early retirement beng conveyed to individual Austin Rover staff this morning is a matter for the company. It would not be appropriate for me to comment on that. Austin Rover must be free to determine employment levels in line with market conditions and the need to be competitive.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill

Will the Minister admit that this announcement confirms our fears that, contrary to the impression that the Secretary of State tried to give in answer to questions on Wednesday, Mr. Graham Day and the Government intend to settle for an Austin Rover share of only 15 or 16 per cent. of the British market and a total production of 450,000 cars a year, instead of trying to get sales back up to more than 20 per cent. of the market and production back to 650,000 a year?

Will the right hon. Gentleman also confirm that the redundancies mean that one in 10 of Austin Rover staff will lose their jobs as a direct result of this defeatist attitude towards sales adopted by Mr. Day and the Government? How many other redundancies have yet to be announced by Austin Rover or elsewhere in the Rover Group? Will the Minister now publish the corporate plan for the Rover Group, immediately and in full, and allow us to see the true scale of the butchery proposed by Mr. Day with the Government's blessing?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The forecasts that the hon. Gentleman mentioned do not in any way follow from the comments that my right hon. Friend made in the House earlier this week. I deny that there is any defeatist attitude in my Department, in the Government generally or on the part of Mr. Graham Day. As the hon. Gentleman well knows, the corporate plan is being studied at the moment.

Photo of Alan Beith Alan Beith Shadow Spokesperson (Treasury)

It is clearly essential that Austin Rover is brought into profitable and successful production and increasses its share of the market. Is it not impossible to make a judgment about the redundancies until we know the content of the corporate plan, which is in the Minister's hands? Do the redundancies form part of the corporate plan? Have they been given explicit approval by the Government as part of the corporate plan, or are they independent of the proposals in the plan? When will we know the answer to that question?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The answer to the hon. Gentleman's question will become apparent when the corporate plan is published.

Photo of Mr Donald Anderson Mr Donald Anderson Shadow Spokesperson (Foreign and Commonwealth Affairs)

Is the Minister seriously claiming that the Government have no views at all about the scale of these redundancies and that they have no responsibility for that or the corporate plan?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

I am merely saying what I said in my original answer. It is for the company to decide its manning levels in order to maintain its competitive position.

Photo of Mr Donald Dixon Mr Donald Dixon , Jarrow

Does the Minister accept that the sooner he sacks Mr. Graham Day the better that will be for the motor industry? Bearing in mind Mr. Day's track record with the shipbuilding industry, he will be disastrous for the motor industry.

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

When the corporate plan is published and the hon. Gentleman reads it, I do not think he will believe that his comment was a fair one. Mr. Day's approach to these matters has been to try to get Austin Rover on to a fully competitive basis. That is very important.

Photo of Mr Ivan Lawrence Mr Ivan Lawrence , Burton

Is it not clear that when Austin Rover begins to emulate the success of Jaguar it will start to take on more people, not fewer?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

My hon. and learned Friend has reminded the House that the manning levels of any commercial enterprise depend absolutely on its ability to be competitive and to sell its products.

Photo of Mr Gerry Bermingham Mr Gerry Bermingham , St Helens South

Does the Minister not agree that the cuts in production levels at Austin Rover will have a spin—off effect on companies such as Triplex which make the glass for Rover cars? Does he agree that support for the component industry is equally important? Do the Government not have some responsibility in that matter also?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The hon. Gentleman is right, in so far as the component industries' fortunes are inextricably linked with the fortunes of any motor car assembler. The fundamental point remains the ability of the motor car company to sell its products. The more competitive it is, the more it sells and the more the component industry will benefit.

Photo of Mr David Bevan Mr David Bevan , Birmingham, Yardley

I am alarmed by the announcement that has been made, but will my right hon. Friend confirm that the redundancies will probably come from early retirements and voluntary redundancies? Can he tell us whether any estimates have been made—this will affect some of my constituents—of how soon the increased sales in America of the Rover Sterling, and the 800 range in Europe and other models, will restore productivity to 650,000 cars a year? The redundancies were based on a lowering of that figure.

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

With regard to voluntary redundancies, today's letter states: It is hoped to achieve the staff reductions through early retirement and voluntary redundancy as far as possible. The answer to my hon. Friend's second question is that the success of the Sterling motor car, which appears to be achieving encouraging penetration of the American market, will be a crucial element in the fortunes of Austin Rover.

Photo of Frank Cook Frank Cook , Stockton North

Further to the question asked by the hon. Member for Berwick—upon—Tweed (Mr. Beith), and bearing in mind that the corporate plan is on the Minister's desk, can the right hon. Gentleman tell us whether the redundancies form part of the corporate plan, or has he not taken the trouble to read the plan yet?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The corporate plan is being studied by my right hon. Friend the Secretary of State. As my right hon. Friend has said on several occasions, a summary of the plan will be published in due course and a statement will doubtless be made then.

Photo of Mr Dudley Smith Mr Dudley Smith , Warwick and Leamington

Is my right hon. Friend aware that competition is the very essence of this matter and that the increased production and marketing of the company's excellent new model will ensure its future, lead to increased sales and perhaps even increased employment in due course? Is he also aware that those in the car component industry in my constituency and that of my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) are very keen to see Austin Rover succeed so that they can expand their businesses?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

That must be right. As my hon. Friend has said, the fortunes of the component industry are inextricably bound up with the fortunes of the motor industry, and an increasingly successful and competitive Austin Rover will help the component industry.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Is it not a bit thick for the Government to send Ministers to the Dispatch Box to claim that unemployment has nothing to do with the Government? Another 1,000 people have been thrown on to the scrap heap as a result of the Government's policy. If there is some minuscule drop in the unemployment figures one Thursday morning, all the Ministers are trotted out on the BBC, bullied as they are, to tell the world that the Government have done a wonderful job. If the unemployment figures fall the Government get the praise, but if the figures rise the Government claim that it has nothing to do with them. The Government gave £200 million to Nissan two years ago to build cars in Britain. Does the Minister accept that that has something to do with what is happening at Austin Rover now?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

Should I deduce from the hon. Gentleman's remarks that he would not be in favour of Government subventions on payments to Austin Rover?

Photo of Mr Harry Greenway Mr Harry Greenway , Ealing North

Is my hon. Friend aware that during my tour of Austin Rover a few months ago I was told that a special effort was to be made to boost the sales of the Austin Rover 800 series in America in February, perhaps with the assistance of a royal personage? Is that likely to happen? Are great things expected, as the company hopes?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The company has high hopes for the Sterling range in the United States, and I gather that a major agreement has been signed with a leading chain of motor car concessionaires. That should help to ensure the success of the car.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

Do the Government seriously intend to wash their hands of the problems of the British motor car industry? Is the Minister not alarmed at the increasing penetration of motor vehicle imports? Is he not equally alarmed at the fact that, before long, a country such as South Korea will be manufacturing more motor vehicles than will Britain? It is not as though it is a dying industry. People are still buying cars. Why do the Government not do more to encourage the production of British vehicles?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

Of course, people ars still buying cars. The question which the hon. Gentleman and others must consider is why they are not buying British cars in sufficiently large numbers. The reason why they have not done so in the past is that they have not been satisfied with the quality, design, production or after-sales service. Only when those are improved — steps of this sort will improve competitiveness — will the British motor car industry get the success that it requires.

Photo of Mr Anthony Favell Mr Anthony Favell , Stockport

Following the point made by the hon. Member for Newham, North-West (Mr. Banks), does my right hon. Frend agree that the problems with the motor industry are not in the private sector? There is no problem with Vauxhall or Ford; they are racing ahead. The problem is with Austin Rover, which is still in the public sector. Does my hon. Friend agree that, for far too long, the management of Austin Rover has dozed on the feather bed of Government support, safe in the knowledge that if there is any risk to management in will come the west midland light horse?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

Jaguar is an example of a company that has moved into the private sector with conspicuous success, once its management was able to take control and not have to rely on Government subvention or interference.

Photo of Mark Fisher Mark Fisher , Stoke-on-Trent Central

Are engineers included among the redundancies? If so, will the Minister explain how designs can be improved if engineers are being sacked?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The description of which I am aware is that they are white-collar staff. The company must decide those from whom it will seek voluntary retirement or redundancy.