Coats Barbour: Job Losses

– in the Northern Ireland Assembly at 4:00 pm on 11th December 2000.

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Photo of Mr Ivan Davis Mr Ivan Davis UUP 4:00 pm, 11th December 2000

asked the Minister of Enterprise, Trade and Investment what has been done to avoid the impending job losses at Coats Barbour, Lisburn.

Photo of Reg Empey Reg Empey UUP

The recent announcement of proposed redundancies at Barbour Campbell Threads is regrettable. However, this was a commercial decision taken by the company because of global market conditions.

Photo of Mr Ivan Davis Mr Ivan Davis UUP

This company is a mainstay in the Lisburn area, and the consequences of 60 job losses at this time of the year, or indeed at any time of the year, cannot be overstated. These job losses will take about £1 million out of the local economy — spending power that will be lost to local business, which will have to grapple with the knock-on effects. It is conceivable that some businesses may be forced to re-examine staffing levels to take account of the loss of these manufacturing jobs. In essence, we are not just talking about 60 jobs, because more may depend on this long-established company’s subcontracts and the money it injects into the Lisburn economy.

Like many other companies in this sector, Barbour Campbell Threads is not immune to the volatility of world markets and the pressure on margins caused by cheap imports. I understand that little can be done on the home front to create a level playing field for this sector. However, I ask the Minister to explore the potential of raising this matter in a European context. In addition, can the Department’s agencies, particularly the IDB and LEDU, undertake a comprehensive review of textiles to determine what can be done to protect remaining jobs and safeguard some of the Province’s older companies?

Photo of Reg Empey Reg Empey UUP

I deeply regret the fact that a consultation process has begun with the trade unions. It may be that some redundancies will take place in the first quarter of 2001, with the remainder towards the end of 2001. However, I want to make a couple of points. First, while the company advised the IDB of the impending job losses, it did not seek financial assistance. I understand that the decision reflects on the inability of the Hilden operation to match the cost of synthetic thread products, which can be sourced more cost-effectively from Asia.

I also understand that they have a strategy of focusing on speciality products and that the company is receiving Industrial Research and Technology Unit assistance on a number of technical matters. These include a method of bonding and sewing threads using an innovative curing system rather than the current solvent-based system.

My Department initiated a review last June. We appointed Kurt Salmon Associates as consultants. The report has been completed, although I have not yet received it. However, I hope to make a statement about it after the recess because a number of Members have asked me questions on those matters and have great concerns. However, what can be done is being done.

Ironically, in the next few days when certain figures will be released, Members will find that there is still a degree of buoyancy in certain sectors of the textile market. However, in this particular case the company has taken a strategic decision to protect its position, bearing in mind that it is a substantial company currently employing some 300 people.

I understand and sympathise with the Member’s concerns that such a large concentration of job losses in the Lagan Valley area has a knock-on effect. However, I believe that the company has made the strategic decision to specialise in areas where it will not be facing the wall of Asian competition with its low-wage economies, as it is very hard to compete under those circumstances.

Photo of Seamus Close Seamus Close Alliance

I thank the Minister for his reply to my Colleague from Lagan Valley, Mr Davis. I wish to place on record my and my constituents’ concern at such a potential loss of jobs at such a historic company — one which has its roots deeply imbedded in the Lagan Valley constituency.

Is the Minister aware that rumours have been circulating for a protracted period about the firm? Will he ensure that there is no asset-stripping in the concern? Will he also ensure that all the grants that have been provided — for example, through IDB — are secured and that there will be no attempt to remove machinery, et cetera, from the country?

Photo of Reg Empey Reg Empey UUP

First, I will say to the Member for Lagan Valley that the company has made no request for financial assistance. The company took a strategic decision, and this announcement was made. To be precise, Hilden is to become a centre of excellence for speciality threads to be used in the manufacture of car airbags, seatbelts, sportswear and upholstery products.

With regard to what the Member describes as asset- stripping, IDB, of course, has rules about how assets are treated if those assets are currently in receipt of IDB resources. That may not be the case in this matter, but we are acutely aware of the sensitivities of these matters. Any company that has an agreement with us has to honour its terms and conditions. It is a legally enforceable document — and I draw that to your attention, Mr Deputy Speaker.

I stress that the company will remain a significant employer in the Lagan Valley area. It has a clear strategy as to what it wants to do. It was its decision and the company has made no recourse to us for assistance.

Photo of Patricia Lewsley Patricia Lewsley Social Democratic and Labour Party

I add my dismay to that of my two Lagan Valley Colleagues concerning the number of job losses at Barbour Campbell Threads. One of the issues raised by many of its workers was the lack of consultation. I am glad to hear that consultation started in June, yet well over a year ago I spoke to some people from IDB about concerns that had been raised. One of the biggest issues was the lack of consultation between the workforce and the management.

Also, machinery was removed from Barbour Campbell Threads and sent to Hungary, and Coats Viyella has another venture in Asia. Is the streamlining a bit more sinister than we thought? In the past, it was suggested that Lisburn would be a centre of excellence, but how many people will be employed in it? Very few, compared to the current numbers.

The work force at Barbour Campbell Threads is a tightly knit community, and two or three people in the same family could lose their jobs. The impact on the quality of life for many in that community will be horrendous. Many of those people have been kept waiting to hear when they will lose their jobs; they could not find other employment, because they were not told when they would be made redundant. If they wished to take redundancy, the company would not let them. People have been badly put upon, and the Minister should take that into consideration.

Photo of Reg Empey Reg Empey UUP 4:15 pm, 11th December 2000

I sympathise with the people who find themselves in those circumstances. It is not a unique situation; people elsewhere, particularly in the textiles industry, have experienced exactly those problems. However, the Member must be aware that consultation with trade unions is a matter for the company and the unions.

I appreciate the local circumstances and that individual families can be disproportionately affected, but I must point out two things. First, there is the whole question of outsourcing, which is the process by which companies based in the United Kingdom carry out part of their functions overseas. That will be a growing problem. Some indigenous Northern Irish companies are now, as a matter of policy, outsourcing in regions such as Sri Lanka, north Africa and South Africa. That will not change, and we will be confronted with that in a range of situations. We will have to return to the issue because, sooner or later, someone will seek assistance for outsourcing. That will be a big issue for the House.

We must also consider the general position in the Lagan Valley. There are 41 IDB client companies in the Lagan Valley area, employing almost 5,000 people. I shall put that in context: selective financial assistance of £80 million has been made available in support of projects worth some £240 million in the past five years. There has been substantial IDB activity in the constituency. Even in the worst case scenario, Barbour Campbell Threads will still have 230-240 employees and will still be a substantial force. They have the technical ability to turn the plant into a centre of excellence, as has been discussed for some time. Funding has been made available, and the Industrial Research and Technology Unit has assisted them with the technical aspects. We are trying to take the necessary steps to protect the long-term future of the company.

Photo of Edwin Poots Edwin Poots DUP

The size of the company makes this a serious blow to the local economy. What investment has IDB made in Barbour Campbell Threads? Does the Minister know how many jobs will be available when the new centre of excellence is created?

Photo of Reg Empey Reg Empey UUP

I shall write to the Member with details of the assistance that has been available for the long term. I repeat that we were not asked for anything additional.

It will remain a significant player in the constituency. Also, Coats Viyella has decided to sell certain parts of its businesses, and a number of Northern Ireland companies in its clothing and household furnishing sector are for sale at the present time. The thread business is going to remain the core business for Coats Viyella. I cannot say how much long-term funding was put into it, but I do know that in 1997 a letter of offer was issued to Barbour Campbell Threads in the sum of £1·4 million. To date, £733,000 has been drawn on the basis of that letter of offer, so there is an ongoing arrangement, which I assume is linked to either sales or employment targets. It might be better if I were to write to the Member with the precise details, but that is the statistical situation at this stage.

Question proposed:

That the Assembly do now adjourn. — [Mr Deputy Speaker]