Thursday 1 November 2007

Job losses at Seagate

The Derry Journal carries an interesting story about job losses at Seagate.

Sadly, what's unusual about the report isn't the redundancies in our sector, the offshoring, the anti-union employer - or the lack of union recognition. It's an unusual approach to offer support to non-members in a redundancy situation - presumably this is part of a drive to organise the plants.

The Belfast Telegraph report gives a lot more of the background - 900 jobs to go as a company relocates production of hard-drive components to a "lower cost" plant in Malaysia.

Seagate have had over £12m in grants since 2001. Will they pay it back? This is an issue raised by many in our sector, as high-tech companies were encouraged to invest in the UK as more traditional manufacturing declined, only to up-sticks as grants dried up or cheaper opportunities became available overseas.

The Amicus 2005 conference endorsed an NEC statement (number 2) on Manufacturing, which said:

"local councils and grant awarding bodies should be directed to impose binding conditions when they offer assistance to businesses with corporate social responsibility clauses including financial penalties when jobs are exported and Amicus should support pension fund trustees in incorporating in to their corporate governance bodies suitable provision to support corporate social responsibility."

A similar point was in Composite Motion 1 on manufacturing:
"Campaign for Government powers to stop companies coming into the UK, obtaining national and local grants and then closing the company down when these are exhausted. Legislation is required to force companies to stay in a region for up to ten years to allow for community stability and security."

From memory, I think this part of the Composite came from a motion from the EEE&IT sector, which has suffered terribly from this problem.

The willingness of companies to milk grants and then move on suggests a more realistic view about offshoring. These companies are not investing in today's cheap-labour economies for the long-term or because of some commitment to international development. In many cases they will milk the local economy for a time, then move on. This is already happening with call-centres in India, where wages are rising, encouraging companies to seek out yet cheaper labour markets.

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