§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]2.21 pm
§ Mr. Dafydd Wigley (Caernarvon)
I welcome the opportunity to raise on the Adjournment of the House today the issues surrounding the announced closure of the Bernard Wardle factory at Caernarfon. The date is one that has particular significance, not only because it is my son Hywel's fourth birthday but because it is the first day of spring. I hope that this will have some symbolism for Caernarfon. The date has other significance also, but I shall return to that in a moment.
The Bernard Wardle Everflex factory was opened at the Peblig Mill at Caernarfon in 1948, and for many years was the largest manufacturing concern in the area. At its peak, it employed 800 persons. Today, there are 322 people working at the factory. Bernard Wardle, Caernarfon, manufactures PVC leathercloth and the fortunes of this industry have fluctuated with those of the motor industry. At times of depression in the motor industry, clearly, the demand for PVC leathercloth will fall.
There have also been changing fashions which have had an adverse effect on the market, and there have been allegations of dumping from overseas manufacturers. None the less, although there has been, over a 10-year period, a decline in the market, this has to a large extent levelled out in recent years. This can be seen by the sales volume of the products produced at Caernarfon, being 4.87 million metres in 1978 and 4.81 million metres in 1979—a virtually stable position.
The Bernard Wardle company clearly felt confident enough of the future in 1978 to purchase an additional factory, the Armoride factory at Earby in Lancashire, the productive capacity of which significantly overlaps with that of Caernarfon. The company, incidentally, owns other factories in Edinburgh, at Cricklewood and in Holland. This large group has largely grown from the success of its original factory at Caernarfon.
901 At the time of the Armoride purchase, reassurances were given to the work force at Caernarfon that the purchase of this factory did not pose a threat to their jobs but rather strengthened the company. A company newsletter stated:The long term benefits to all of us will be increased security of employment inside a stronger and more progressive group of companies".The management of Bernard Wardle did, however, challenge the work force at Caernarfon to improve its productivity and profitability—and during 1979 the work force showed exactly what it could do. It improved productivity by a staggering 37 per cent., and the site profit for the Caernarfon factory for the year ending 1979 was £650,000. Even allowing for a fair proportion of group overheads to be allocated against Caernarfon, it still remains clear that Caernarfon contributed a large proportion of the £900,000 profit recently declared by the group for 1979.
The success of the Caernarfon factory was noted in the summer 1979 issue of the Bernard Wardle company newspaper, when the managing director, Mr. John Sharpe, stated:Everflex are now making a major contribution to Group profitability and I believe this to be the logical result of the new spirit which is evident to all who visit the Caernarfon site. Well done, John Roberts and the Peblig work force.It certainly appeared that the Caernarfon work force had done everything expected of it, and it is worth putting on record that the tremendous improvement in productivity arose from a really constructive attitude taken by the trade union leadership on doing away with restrictive practice to ensure that the factory was on a sound footing.
It was therefore a bombshell when it was announced on 31 January that the Bernard Wardle company was to close its Everflex factory at Caernarfon at the end of May, making 322 persons redundant—this in an area of high unemployment, where the chance of getting alternative work is remote.
The company's reason for the closure was to transfer the work from Caernarfon to the newly acquired Armoride factory, and it was adding salt to the wound when the Caernarfon work force was offered jobs at Earby if it chose to leave Wales to work. Clearly the closure was taking 902 place not because of the unprofitability of Caernarfon but to transfer profitable work to the factory at Earby which the company had bought only two years ago.
Many of the 322 people being made redundant had served Bernard Wardle of Caernarfon for 20 to 30 years. It is by their efforts that the company has grown and by their performance last year that productivity has increased. The reward for this effort and loyalty to the company has been a sharp kick in the teeth.
The Bernard Wardle closure has a stark significance because of the message that it contains for employees in other companies who are trying to improve productivity. If the Government believe in what they say about profitability and productivity, they should by now have called the directors of Bernard Wardle to London to explain why the company has acted so disgracefully, in a way which can do nothing but harm not only to this Government's declared regional policy but also to their general industrial objectives.
But the closure of the Caernarfon factory has greater significance because of its timing. It appears that the decision to close it was taken in London on Monday 28 January, although not announced until several days later. By a remarkable coincidence, worthy almost of divine providence, a takeover bid was announced for the Bernard Wardle company the following day, Tuesday 29 January.
What has happened since this closure announcement? The employees at Caernarfon immediately set up an action committee to fight the closure. They came forward with their own plan, validated by local management, whereby the company could save over £400,000 a year in running costs. That was greeted with scant interest by the board.
At this point, in view of the takeover bid which had been announced, the men asked the company to suspend the closure decision until after the outcome of the takeover was known, because there would then be new board members and probably a new chairman. By another coincidence, it is today that the outcome of the bid is known. I understand that the bid by Mr. Graham Ferguson Lacey's 903 company, Ferguson Investments, has been successful, taking 88 per cent. of the shares. However, the then directors would not even suspend their closure decision. They seemed hell-bent on closing the factory irrespective of whether they would be in charge of the company when the decision was effective.
The action committee has subsequently tried to turn every stone to save the works. There has been a mammoth demonstration of support in Caernarfon, with 3,000 people marching through the streets to call for the decision to be reversed. What we see in Caernarfon is a determination of the people to stay in work, in contrast to so many other stories which nowadays appear in the media.
I cannot speak too highly of the leadership in this battle of Mr. Tom Jones, district secretary of the Transport and General Workers Union, and of Mr. Bleddyn Davies, the chairman, and by other members of the shop stewards committee.
The Government are often quick to criticise work forces with poor industrial records, but this factory has had only one strike in 12 years. The Government are willing enough to intervene and pass legislation to protect owners from rebellious workers. Are they equally willing to protect an innocent work force from the ravages of a socially and economically irresponsible management?
Feeling has been running high in Caernarvon, and rightly so. We are talking not about scrapping some disposable cogs in an industrialised juggernaut but about men and women and families, and children who in future will want to work in their own community—men and women who have given the best years of their lives to build up the company. It is nothing short of a scandal that they can be tossed aside by some Johnny-come-latelys whose main objective is to salvage their own reputations at the expense of those who built up the company and gave them their positions.
Some will say that the directors are only safeguarding the interests of their shareholders, but I challenge that. Not only do I believe that these decisions will cause the company havoc, but by what virtue do the directors claim to act in 904 accordance with the shareholders' wishes? There were about 500 shareholders with strong North Wales connections before the takeover started, and judging by my letters the overwhelming majority want to keep the factory open. It is little wonder that there has been tabled by shareholders for the company's annual general meeting next month a motion for the removal of the managing director. There have even been efforts by local business men to buy the Caenarfon plant as a going concern, but to no avail.
It is not even as if the company was running at a loss. In 1975, the company made £259,000 profit; in 1976, £778,000; in 1977, £1,056,000; in 1978, as high as £1,515,000. Last year, after allowing for an incredible loss of £449,000 at the Dutch subsidiary of Shotte BV, there was still a group profit of £909,000. We are therefore not discussing a company which is a lame duck.
There are many unanswered questions in this whole sorry business. Was it really a coincidence that the Caernarfon factory was closed the day before a takeover bid was announced? Or is it a question of the present management rushing through a closure decision lest the takeover might frustrate their plans to close the factory? An indicator of the truth will be seen by the policies followed by the new owners after the takeover is complete.
There are other questions which need to be answered, such as the share dealings in the company, not only over the few days surrounding the takeover bid but also during the three months preceding it. Why, for example, were over 200,000 shares transferred in December from a certain company to a holding of a nominee shareholder? Why, indeed, have there been as many as 80 nominee accounts in this company in recent years —in a relatively small company at that?
These may be questions which we cannot pursue at present in view of the Stock Exchange inquiry, but they may well be questions to which we shall wish to return at a later date.
§ Another question is why—
§ It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.