Leaked papers reveal Visteon 2001 closure plan
Visteon had considered closing down its factory as early as 2001 — just a year after it took the plant over from Ford, the Belfast Telegraph can reveal today.
Last month 210 workers at the Belfast plant began a sit-in after they were laid off with just hours’ notice after administrators KPMG were brought into the beleaguered factory.
However, leaked documents drawn up in May 2001 – obtained by the Telegraph – reveal Visteon had compiled three different options for closing or downsizing the factory eight years ago.
It also had produced comprehensive plans for where Visteon’s Belfast's products would be outsourced.
Hundreds of former workers are now in dispute with the firm over redundancy payments.
Their union — Unite — argues that they had been promised the same pay and conditions under Visteon that they had enjoyed with Ford but instead they have been offered statutory redundancy payment on much inferior terms.
They point to an agreement signed in 2000 which stated: “Following the agreement signed with the European Works Council (EWC) all Visteon employees ... will keep mirrored employment terms and conditions, as they are transformed from Ford to Visteon and will continue to benefit from this agreement.
“The mirroring of employment conditions includes pay, pensions and other benefits. Visteon will honour the EWC agreement.”
Four months after Visteon made this agreement, the company had started considering how to close or downsize the plant.
And today Visteon admitted the Belfast plant was already operating at a loss before they took it on.
A spokeswoman said: “Following Visteon's incorporation in 2000, the losses at Belfast were already substantial and it was clear that the plant was unlikely to be viable without significant restructuring. At an early stage in the corporation's history [2001-2002], Visteon initiated a study to investigate its options for ‘fix, sell or close’ strategies for the plant code named ‘Project Stone’. Efficiency and cost reduction actions were taken as a result.”
She also conceded that workers were given very little notice that the plant was closing.
“The Administrator was appointed on March 31 following the withdrawal of all financial support to Visteon UK Ltd. The Administrator met employees to communicate that Visteon UK Ltd was in administration and to confirm that employees would be made redundant that day,” she said.
When asked how long the terms of the EWC cover Visteon employees for after it was signed in 2000, the spokeswoman replied: “Visteon UK Ltd met the terms of the agreement for the duration of employment with Visteon UK Ltd.”
Administrator KPMG returned to the High Court today to resume proceedings to evict the workers from the factory were they have mounted a three-week sit in.
According to the leaked document, the Project Stone proposed three “alternative strategies” for Visteon Belfast.
The first — “to allow current products to run out in 2007 with no new business coming into the plant” — was considered but rejected.
The second — to close in 2001 and “exit the pumps business and transfer air/fuel products to a Visteon facility in Central Eastern Europe” — was also not recommended.
Project Stone however opted for the third option which was to downsize the plant. It said: “The main plant would be vacated or decommissioned and support operations would be relocated to the annex area.”
In a ‘Risk Explanation’ outlining problems that may arise during closure, the report said that in the event of closure in 2001: “Risk of industrial dispute is high because strategy is not in line with the EWC [European Worker's Council] agreement. Risk to the customer [Ford] is high because of the likely-hood of industrial action and/or sabotage.”
In the case of closure in 2007 it stated: “Risk of industrial dispute is low because EWC agreement is not broken. Risk to the customer is medium because morale inside the plant will decline as time goes on.”
The fact that Visteon employees lost their livelihoods and pensions in a matter of hours raises questions as to why they were given such short notice when Visteon had considered closure eight years ago.
John McGuire, Senior Convenor of Unite, said: “When the factory was operating at a loss in 2000 Visteon took over, but Ford was their only customer. This enabled Ford to go elsewhere for cheaper parts and factories would compete to lower prices. One year we were almost breaking even. Ford then asked for £14m in what it said it was owed from Visteon.”
Sinn Fein President Gerry Adams demanded a probe into the Visteon closure.
“The information which is now emerging needs to be rigorously investigated,” he said.