Burberry Question

I had my urgent question on the proposed Burberry closure yesterday:

Ffatri Burberry
Burberry Factory

Leighton Andrews: Will the Minister make a statement on his discussions with Burberry concerning the proposed closure of its factory at Treorchy? (EAQ0984(EIN)

The Minister for Enterprise, Innovation and Networks (Andrew Davies): I think that I speak for all Members in saying that I was very disappointed indeed by Burberry’s announcement. Last week, I met the regional secretary and the plant official of the GMB union. at Treorchy and subsequently met company representatives and asked them to reconsider their decision. I have made offers to the company and have pledged my full support to maintaining the operation in the Rhondda, as have the unions. Should the company proceed, I believe that the decision that I have taken today, following strong and longstanding representations from Rhondda Cynon Taf County Borough Council and you, to include Treorchy and Treherbert in our Heads of the Valleys programme will be of great assistance.

Leighton Andrews: I welcome your announcement about extending the Heads of the Valleys programme to Treherbert and Treorchy. As you know, I have consistently raised that with you in correspondence and in committee over the last 18 months. Can you confirm that you have offered the company whatever assistance might be feasible from the Welsh Assembly Government to keep jobs in the Rhondda? Do you agree that the worldwide management of Burberry may not have taken fully on board the implications of pulling out of Wales when the global face of Burberry is the Welsh actor Ioan Gruffudd?

Finally, would you recognise the immense efforts of the workforce at Burberry in Treorchy, with its unions, to bring down the overall cost of production at that factory?

Andrew Davies: Yes. GMB union officials last week went through, in great detail, what the union has been doing with the company to make the operation more efficient and to reduce costs, and it has done that successfully. The company is very profitable. I believe that there were profits of £155 million last year and that there are projected profits of in excess of £170 million this year, but the company argues that the local plant is, nevertheless, still making a loss. We questioned company representatives closely about that and I have reiterated our support for the company. There is an outstanding regional selective assistance offer on the table, which the company can still take up.

The size of the factory is substantial, at 100,000 sq ft. The operation’s footprint within that factory is much smaller, so we have offered to help the company look at reducing its costs by moving to a smaller plant or location and at a whole range of other measures. I hope that the company will consider that and it will have my full support along with that of the Assembly Government as well as that of the unions in doing so.

Any company that operates globally has to take cognisance of the market situation but also include the views of consumers, and consumers have made it clear in the past that when it comes to buying goods and services, if they do not support a company in terms of its attitude towards, for example, corporate social responsibility, it can lose out as a result. Your point is well made and it has been made to companies in the past and I questioned the company about its commitment to corporate social responsibility.

I also had a question to Rhodri on the same subject:

Leighton Andrews: You and I spoke about this matter on the day that we heard about the announcement, and you will be aware that I and Chris Bryant, the Rhondda Member of Parliament, went straight to the factory and met workers as they were leaving work. We also met the trade union and then had a meeting with the management to discuss the issues. It is quite clear that Burberry has carried out a behind-the-scenes review of costs and is looking at this purely on a cost basis. Do you agree that everyone in the Chamber should now get behind the unions at Burberry? It is important that the workforce is running this campaign, and that we support it and its unions, the GMB and Amicus. Do you also agree that if Burberry wants to be seen as a British brand, it has to keep manufacturing jobs in Britain?

The First Minister: I agree with the point that getting in there to try to dissuade the management from pursuing the course that it has announced during the current consultation period and supporting the campaign led by GMB, as the union that organises most of the workforce, as well as Amicus, is important if there is any chance of persuading the company to change its mind. If it does not, then Team Wales will bring its efforts into play in order to place workers in other work where there is a demand for employees. There is never a good time to lose your job, but the relatively least worst time is when the economy is buoyant and jobs are at record levels, as they are currently. It is important then to say, ‘What else can we do to try to ensure that the upper Rhondda community is made as prosperous as possible, despite this grievous blow?’. Burberry considers itself to be a very British, but world, brand. That is one reason why it is keeping rain-coat, trench-coat and duffel-coat production in Yorkshire. However, it would seem that it does not see the polo-shirt market in the same way. Those are matters for the fashion trade; I have no expertise in that area.

Both the Western Mail and the Echo have picked up on the possibility of Ioan Gruffudd being lobbied by Burberry workers, as did ITV Wales yesterday, and so has the BBC website.

For interviews with the Burberry unions, see here.