Make Diageo Think Again Over Closures Decision, Workers Appeal to Shareholders

LONDON - Workers representing the 900 Diageo workers whose jobs hang in the balance with the threat of widespread cuts and the closure of the historic Johnnie Walker plant at Kilmarnock and the Port Dundas Distillery will be outside the company’s AGM today (Wednesday) fighting for their jobs.

Warning that industrial action to oppose the cuts is a growing possibility, the workers want the shareholders to force discussion of the alternative proposals submitted to the Board by the workers and their union, Unite.

The workers have journeyed from Scotland for the meeting which is set to contrast yet another year of enormous profits for Diageo with the certain devastation the company’s restructuring plans will bring to their communities. In particular, there is deep concern for the Kilmarnock plant, the home of Johnnie Walker for 180 years, which will close under Diageo’s plans. The plant is among the last major employers in the Scottish town, and counts generations of the same families, friends and neighbours among its workforce.

Diageo workers, themselves shareholders, believe that the management has hidden the board from any consideration of alternatives to their savage plans. The trade unions’ alternative plan could save Diageo and its shareholders some GBP80 million, avert the need for closures and job cuts on the widespread scale envisaged, and put a stop to the reputational damage Diageo is suffering as the campaign to halt the cuts builds momentum in the UK and overseas. However, the company’s management has dismissed the proposals out of hand.

Among the changes proposed by the workers are:

* At Kilmarnock, a saving of GBP84 million on the cost of building a new facility plus saving GBP36 million needed to close the plant. Labour costs savings of GBP8m per annum could also be saved, in addition to the further assistance which could be levered in through support from Scottish Enterprise and local authorities

* Safeguarding the Scotch whisky distillery plant in Port Dundas, Glasgow, to ensure whisky continues to be distilled by Scottish Diageo workers, and at the same time help meet short-term capacity needs. Up to GBP5 million savings per year could also be made by lowering labour costs and through cost savings.

According to Unite, the trade union proposals would deliver flexibility and more efficient working, in contrast to the management proposals which are based on an incomplete financial analysis and will create a risky three year gap between capacity and demand, which is set to grow despite the recession.

Contacting them ahead of the meeting in a letter to fellow shareholders, the workers state: “Diageo’s proposals to axe 900 jobs across Scotland will destroy communities and ditch over a century of proud heritage for the Johnnie Walker brand in Scotland. The moves have been described as akin to the company ripping the heart out of the Scottish whisky industry. Diageo workers are determined to fight these plans, believing there is a more humane alternative, one which also makes sound business sense.

“We know that Diageo’s shareholders want a strong and thriving business. So do we, because strong businesses mean good jobs. But as shareholders, we think you also want one which can hold its head up high in the towns and the communities that have made you such good returns.

“This is a loyal workforce, one which includes generations of the same family. Their hard work helped make this company a global success story, one which pocketed a healthy GBP2 billion profit this year. Only this year the workforce agreed pay restraint in exchange for job security, to unpaid time off and to short-time working to protect those massive profits. Please do not repay this loyalty by slashing 900 jobs.

“The trade union business plan proves that Diageo can still increase efficiency and profitability in Scotland without closures and job losses. We believe that you need to know the details of that plan, which provides significant savings both in capital investment and annual costs, so that you can judge for yourselves.”

The workers go on to say that Diageo’s plans “have prompted widespread opposition from local communities and across the globe with a serious risk to the brand. In July, 20,000 people called for Diageo to think again as they marched through Kilmarnock. Since then, over half a million supporters have joined the campaign and it is growing every day. Poor public opinion of Diageo poses a serious risk to brand integrity and future profits. For every day this campaign continues, Diageo’s reputation in Scotland and abroad is hit.”

Outside today’s AGM, Diageo workers and their union reps will be leafleting shareholders as they go into the meeting from 1.30pm-2.30pm at the Institution of Engineering and Technology, 2 Savoy Place, London WC2R 0BL. The workers will be carrying with them a huge “Message in a Bottle” which contains just some of the messages of support sent to them as they fight to save their jobs.

Source: Unite the Union

For further information, please contact Pauline Doyle on +44(0)7976-832-881 or Karen Viquerat on +44(0)7768-931316