Hundreds learn of jobs bombshell by video link

Published on Friday 12 January 2007 01:12

Key quote

"This is a very difficult but necessary proposal in response to changing market conditions. Our competition is also moving its manufacturing operations to lower cost areas." - ALLAN VALENTINE, NCR

Story in full On the way to work they were buffeted by gale-force winds and rain. Once there they were battered by a different force of nature - the global economy.

The bombshell announcement that 650 jobs were to be axed at the NCR cash- machine factory in Dundee was far more devastating than even the most pessimistic worker had forecast.

The jobs blow, revealed by a video message recorded at the company's base in Dayton, Ohio, ripped the heart out of what was left of Dundee's once-thriving manufacturing sector.

In its heyday, the 60-year-old plant employed 6,500 men and women, producing one in three of Europe's hole-in-the-wall cash machines. But the firm said the Wester Gourdie plant could no longer compete in the marketplace it once dominated.

Production will be switched to a new NCR plant near the Hungarian capital, Budapest, where the work of Dundee employees will be done by cheap Eastern European labour - employed at up to a tenth of the pay rates on Tayside.

There are mounting fears the knock-on effect of the jobs blow - the worst to hit Dundee since the Timex factory closure - could result in a further 1,000 jobs being axed among suppliers and other businesses in the area, already reeling from a succession of job losses.

Last year, the supermarket giant Tesco announced plans to axe more than 400 jobs in Dundee after its decision to build a distribution depot in Livingston. Earlier this week, the energy services company Wood Group announced 50 job losses at its Dundee turbine services operation.

The city's gloom was in stark contrast to the upbeat launch, 56 miles away in Edinburgh, of a groundbreaking stem-cell research unit that will employ hundreds of scientists and other staff.

And the news earlier in the week that Dundee-based financial services group Alliance Trust was planning a 14 million headquarters in the city centre, creating 160 jobs, seemed quite forgotten.

Assurances that 100 manufacturing posts would remain at NCR in Dundee, together with 600 posts in engineering and advanced development, services support and marketing cut little ice

And it was hardly a day to recite those discrete and invisible benefits of globalisation - falling prices for household electronic equipment, cheaper clothes from the Far East, a greater array of affordable gadgetry. None of it eases the pain for the unskilled workers left behind in Dundee, many of whom were already preparing to make the trip to the job centre.

Inside the factory known as "The Cash", women wept openly. But the overriding mood was of anger and a sense of betrayal by a company which, only a year ago, had assured Tayside workers that the opening of the new plant in Hungary would make no difference to the Dundee operation.

Some furious workers refused to listen any more as the management tried, amid growing shouts and jeers, to explain the reasons behind their decision.

George Devlin, 42, who has worked in the company's kit and make-up department for three years, was the first to storm back out through the gates. And there was no hiding his rage at the way the workforce had been treated.

Mr Devlin, a father of three from Fintray, said: "There is just total anger and disgust at the management. Last year, they told us a barefaced lie that when the Hungary plant was opened, it was never going to affect Dundee whatsoever. But now they are saying they are closing the operations altogether because it's costing too much and they lost 42 million last year.

"They are going to Eastern Europe - Hungary or wherever they can get cheap labour.

"I walked out of the meeting because I didn't want to listen to it any more - lies, lies and more lies."

He went on "There are people in there who have worked here all their lives and they are getting treated like this. There are women in there crying. There was a woman in there who has worked for 36 years and she couldn't even speak when she tried to ask a question. She was breaking her heart crying. The future for me and everyone else is bleak - very bleak."

He added: "It was great job with great conditions and great wages. I am paid 8.75 an hour for unskilled labour and there are tradesmen in Dundee who are not getting that."

John Millar, 47, who worked on the main assembly line for 22 years, said he was "completely shattered". Mr Millar, whose wife, Ellen, works in the NCR office, said: "It's soul-destroying and a sad day for Dundee.

We've done everything this company has asked us to do. We've never been militant and been on strike or anything. We've worked the overtime and the different shift patterns they asked us to do over the years to keep this place going. And this us our reward."

Jennifer Brannan, 46, who has worked on the production line for five years, said: "People are really upset and angry and swearing in there. I'm just waiting for my friends to come out before we go down to the job centre."

John Letford, Dundee's Lord Provost, who once worked at the factory, said: "This is a terrible blow for the employees, their families and for the city of Dundee. It really is heartbreaking for them all.

"Like so many people in Dundee, I worked for the company, but that was in happier times when there was a much larger workforce and none of the threats of losing your job because factories had been created in some other part of the world to do exactly the work that you and your colleagues were doing, and doing well."

Allan Valentine, NCR's director of manufacturing operations in Dundee, said the job losses had been caused by the company's plans to realign its ATM global manufacturing operations.

"This is a very difficult but necessary proposal in response to changing market conditions," he said. "Our competition is also moving its manufacturing operations to lower cost areas.

"Despite our efforts to take cost out of our operations, it costs us more money to build ATMs on a unit-by-unit basis in Dundee than in any of our other manufacturing plants. We cannot continue with our current strategy.

"We do understand that these proposed changes in our manufacturing operations will bring a challenging time for affected employees and we will be outlining a comprehensive employee-support programme to NCR employee representatives."

Meanwhile, Birds Eye announced it was to close its frozen-food factory in Hull, which makes fish fingers and other products, with the loss of nearly 500 jobs later this year.

Derek Simpson, the general secretary of the Amicus trade union, said: "This is a black day for manufacturing."

Workers storm out in disgust at 'lies, lies and more lies'

FURIOUS workers at Scotland's largest cash machine manufacturing plant stormed out of their factory yesterday after being told, through a transatlantic video link, that 650 NCR employees in Dundee are to lose their jobs .

They accused the management of the Ohio-based multinational of a cynical betrayal and treating them with contempt after the company announced plans to switch manufacturing of hole-in-the-wall ATMs to a new plant in Hungary and to other factories in Beijing and India.

It was a devastating blow to the Tayside economy already reeling from job losses at the city's Tesco distribution base, the Michelin factory and the Wood Group.

George Devlin, 42, who has worked at NCR for three years, was the first employee to leave the mass meeting where the workforce were shown a video in which NCR's Dayton-based chief executive Bill Nuti spelled out the reasons behind NCR's bombshell decision.

He declared: "I walked out of the meeting because I didn't want to listen to it any more - lies, lies and more lies. All we got was a video from the head man in America saying: 'I am sorry I can't be there and I have sent somebody else over to tell you the news'."

Derek Shaw, 49, an assembly operator who has worked at the NCR plant for 17 years, said he was "disgusted" at the treatment of a loyal workforce.

He said: "There was a video link and the company's chief executive appeared on the screen. That's the first time I have seen him in 17 years [of] working for the company. It's just a disgrace the way we've been treated."

The trade union Amicus accused the company of reneging on previous assurances on the future of the Dundee site.

Gillian McKay, the union's regional officer, claimed: "Only 14 months ago NCR's president and chief executive, Bill Nuti, said he was 'one million per cent' committed to the company's Dundee operation and that the plant opened in Hungary would have little or no impact on the Dundee site. We are appalled by this announcement and our members are justifiably angry."

Last night, as local politicians expressed fears that another 1,000 jobs could be lost in the city as a result of the effective end of manufacturing at the plant after six decades, Nicol Stephen, Scotland's Enterprise Minister, announced the formation of a rapid reaction force to address the Dundee jobs crisis.

He said: "This is a very serious blow to the individuals involved, their families and the city of Dundee. I am announcing the formation of a rapid reaction team to give support to everyone involved. It is very important we give as much support as we can to the 650 individuals involved."

NCR, which plans to retain 700 posts in manufacturing, advanced development and in service-support operation in Dundee, blamed a "changing market environment" and competitive pressures for the decision.

But Stewart Hosie, the MP for Dundee East, said: "The mood of the people I have spoken to so far has been unbridled anger. People have been left hurt and devastated."

Fortune built on making ATMs

KNOWN as "The Cash", National Cash Register, or NCR, is a well-established part of Dundee life.

Like jute, jam and journalism, the manufacturer of cash machines has provided regular employment for many in the city for the past 50 years.

The United States-based company first began operations in the city in 1945, manufacturing cash registers.

But it was after a Scot invented the first automated teller machine, or ATM, in the early 1960s that the fortunes of NCR really took off.

John Shepherd-Barron, from Tain in Ross-shire, came up with the idea of the auto-teller after becoming frustrated at not being able to access his own money at weekends.

He installed the world's first ATM at a branch of Barclays Bank in London in 1967.

NCR soon became one of the leading manufacturers of cash machines, providing ATMs for 100 countries.

At its height, the company employed 7,000 people on nine sites in Dundee and today employs more than 1,300.

NCR has also led research and development from the city, building a 20 million laboratory for the engineering development of cash machines called The Discovery Centre in 2002.

Over the next ten years, it is expected that the number of regular users of cash machines will increase by an estimated 40 million, but the rate at which new machines are being installed is expected to decline because of card fraud.

How manufacturing sector measures up in Hungary

SCOTLAND

Unemployment: 5.2 per cent

Population: 5,094,800

Public holidays: 8

Average weekly manufacturing wage: 350-400

Total area: 78,772sq km

GDP per capita: 13,133

In 2005, total Scottish exports (excluding intra-UK trade) were provisionally estimated to be 17.5 billion, of which 70 per cent (12.2 billion) were attributable to manufacturing.

Scotland's primary exports include whisky, electronics and financial services.

HUNGARY

Unemployment: 7.2 per cent

Population: 9,981,334

Public holidays: 12

Average weekly manufacturing wage: 50

Total area: 93,030sq km

GDP per capita: 8,377 (2005)

Private sector accounts for over 80 per cent of GDP.

Exports: 32 billion (2005)

Its main exports are machinery and equipment (61.1 per cent), other manufactured goods (28.7 per cent), food products (6.5 per cent), raw materials (2 per cent), fuels and electricity (1.6 per cent).