Michelin shows dangers of ‘invisible hand’ of market – Richard Leonard

Michelin has given the Scottish Government until the end of November to come up with a rescue plan (Picture: Michal Wachucik/AFP/Getty Images)
Michelin has given the Scottish Government until the end of November to come up with a rescue plan (Picture: Michal Wachucik/AFP/Getty Images)
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It’s welcome that SNP Finance Secretary Derek Mackay is trying to save the Michelin plant in Dundee, but both the Scottish and UK governments need a proper industrial strategy to help these sort of problems from occurring, writes Richard Leonard.

Dundee is, in many ways, a microcosm of Scotland.

It is a fusion of old and new, urban and rural, rich and poor. It has significant inequality, but also a resilient spirit, good humour and a great sense of itself.

The city has featured fine figures throughout history – E D Morel and Mary Brooksbank spring to mind – as well as suffragettes and active trade unionists who have risen to lead the union movement.

Most importantly it has, like the rest of the country, suffered the ravages of neoliberalism and laissez-faire economics.

The loss of the jute industry closed Dundee to the world – a reality that is only beginning to change with the revitalisation of the city’s port and the development of the V&A as a global attraction.

While other industries arrived, they too soon left as central government politicians paid homage to privatisation and deregulation.

Timex, despite the valiant efforts of strikers and trade unionists, left the city. Just a few years later, NCR would make 600 workers redundant, despite making an £85 million profit. By the turn of the century, the only large manufacturer left was Michelin – and now even that is under threat.

The simple reality is the Michelin factory simply cannot be allowed to close. It is too valuable to the city and the people to fail.

Not only does it employ 850 people, but it provides training and development opportunities for Dundee communities.

This will be, understandably, a time of great concern not just for the workforce itself but for the entire city.

As a trade union organiser for 20 years, I understand the experiences the Michelin workforce will currently be facing. So let me be clear: my thoughts, and those of the wider Labour movement, are with those workers, their families and the whole city of Dundee.

READ MORE: Michelin gives Scottish Government 3 weeks to save Dundee site

But from this darkness we must draw hope of a new dawn. We must believe, first and foremost, that the Michelin factory can and will have a bright future.

That is why I have already suggested a number of steps that could be taken immediately to help save the factory.

Firstly, the UK Treasury must provide the additional £50m that was promised for the Tay Cities Deal.

Bringing the UK Government’s total contribution back up to £200m would provide a welcome boost to the local economy at a troubling time. It would also be a show of confidence in Dundee and the wider region.

With so many jobs on the line, now is not the time for either the UK or Scottish governments to start playing constitutional games – it is a time for practical action.

Secondly, both the UK and Scottish governments must commit to a review of public procurement to see what can be done to further support the Michelin factory. That should include a review of who supplies tyres for the Scottish Government’s vehicle fleet, as well as the much larger fleets across Scotland’s public services. This could provide much needed additional orders for the factory in the short term – and perhaps provide a viable platform to support its future.

Thirdly, both of Scotland’s governments must work closely with trade unions, as well as Dundee City Council, to deliver a positive solution.

It is welcome that SNP Finance Secretary Derek Mackay has already indicated his willingness to work collaboratively to find a solution and Labour stands ready to offer its effort in pursuit of this end.

In the longer term, one possible avenue that should be quickly explored is the potential role of Scottish Enterprise.

READ MORE: ‘Betrayal’ as Michelin announces closure of Dundee plant

It is a matter of public record that Scottish Enterprise has awarded Michelin in Dundee in total more than £5m since 2011, but it has spent just £500,000 of a £10m fund to support business so far this year. The Scottish Government must now urgently seek to establish if that money could be used to either secure the long-term future of the plant or, if need be, refit it for another purpose.

Another matter it should look at is the fate of the plant’s 60 apprentices. While the focus must be on saving the factory, the Scottish Government should also arrange a contingency so those who will not have completed their course by 2020 could, if need be, finish their apprenticeship elsewhere.

Every possible lever of government – at both a Scottish and UK level – must be pulled in the collective effort to save these 850 jobs and secure the factory’s future.

Yet the spectre of the closure of another major employer should also, in the longer term, prompt deeper questions about whether our economy is really working.

While the situation at Michelin is a source of great concern, it is not the first of its kind.

At the end of last year, BiFab faced closure with the loss of hundreds of skilled jobs in Fife and the Western Isles.

Before that, Fergusons shipyard in Port Glasgow became the latest in a long line of manufacturing employers facing closure. Then, Tata Steel faced closure.

While these plants in Dalziel and Clydebank were rescued, that should not stop us asking why they needed rescued in the first place.

Put another way, saving people from a desert island is laudable in and of itself, but the question needs to be asked how and why the people ended up in that situation.

And this situation is all the more frustrating because the answers are not complicated or mysterious, they are obvious. The invisible hand of the market does not protect jobs or skills. Without planning, there is industrial anarchy.

That is why Scottish Labour has developed a proper industrial strategy, which will not just protect high-wage, high-skill jobs but create more of them too. It outlines the prospect of a Marcora Law to boost employee ownership, as well as a firm commitment to involve trade unions so that we act to make things go right in the economy, rather than just react when things go wrong.

Dundee itself shows this. From jute to Timex to NCR, time and again the same errors have been repeated and the same catastrophic consequences felt.

This time, with Michelin, we cannot repeat the mistakes of the past.