NICOLA Sturgeon has been urged to carry out a new state aid bailout to save the historic McVitie's factory in Glasgow after its Turkey-owned and UK-based owners said it planned to go ahead with closure and the loss of 472 jobs.
Unions have accused pladis, the owners of the Tollcross factory in Glasgow of acting in bad faith after it said an alternative plan for new premises "did not present a viable alternative".
A report claimed that the £50 million cost of building a new biscuit factory would match the money lost to the Scottish economy each year if the axe falls on the current plant.
It is estimated the knock-on effect of closure would hit a further 400 jobs, with the total cost to the economy estimated at £49m per year.
READ MORE: Ministers react as 470 Glasgow McVitie's factory staff are handed redundancy notices
The 472 staff have already been formally issued with redundancy notices.
The Scottish Government has stepped in before to save business and jobs through nationalisation and financial support.
The shipyard company at the centre of Scotland's ferry-building fiasco Ferguson Marine was nationalised in August 2019 after it went into administration and after it received loans totalling £45m.
Glasgow MSP Paul Sweeney, Scottish Labour’s shadow minister for employment, called for state aid intervention and accused pladis of failing to engage constructively and in good faith over the alternative plan.
“I couldn’t be more disappointed - there are nearly 500 jobs at stake here in a community that simply cannot afford to lose them. While I appreciate that the First Minister has personally intervened, the Scottish Government must now step up and use every power at its disposal to save these jobs. If that means introducing a comprehensive state aid package then that’s exactly what needs to happen," he said.
“We are at a crisis point in Scottish manufacturing. A proactive approach must now take priority – simply firefighting a constant barrage of redundancy notices from multinational companies is evidently an ineffective strategy and one that has been allowed to continue for far too long.”
The GMB Scotland union, who were key players in an action group chaired by the finance secretary Kate Forbes that came up with alternative proposals to closure said "honest answers" were required from the company.
GMB Scotland senior organiser Hazel Nolan said: “It seems clear now that pladis had no intention of engaging in good faith over the future of Tollcross. General Manager Jim Cuthbert told us they 'expected more' from the counter-proposals but offered no specific comment on what 'more' would look like.
“That’s not good enough. If pladis are walking away from this community after nearly a century of production, and after eighteen months of constant manufacturing during this COVID-19 pandemic, the very least the workforce deserve is honest answers.
“That honesty is also needed for the members of the action group because if a firm like pladis no longer sees Scotland as a viable place to do business, then everyone needs to understand why and what must be done to prevent further manufacturing decline.” Pladis said it had "carefully reviewed" the alternative proposals put forward as part of the ongoing consultation with employees and their representatives.
It said: "The alternative proposals did not present a viable alternative to the original proposal. The rationale for the proposed closure, first communicated to employees on 11 May, is to address excess capacity across pladis’ UK sites and protect the long-term sustainability of the business."
Production from Tollcross will now move to other pladis sites within the UK and the factory is expected to cease operations in the second half of 2022.
Generations of families have worked at the Glasgow biscuit works which first opened in 1925 as part of the Macfarlane and Lang's Victoria Biscuit Works.
The McVitie’s presence in Scotland goes back to the original Scottish biscuit maker, McVitie & Price Ltd, which was established in 1830 in Edinburgh.
Pladis said it had "engaged regularly" with the Scottish Government, Glasgow City Council, co-chairs of the Action Group Kate Forbes MSP and city councillor Susan Aitken, and Scottish Enterprise throughout the process to date.
Pladis added: "The consultation process will continue, focussing on the collective redundancy arrangements."
David Murray, pladis UK & Ireland managing director said: “We know this news will be difficult for our colleagues at Tollcross, so it is with regret that we announce our intention to proceed with the proposal to close the site.
"Our priority is to provide employees with the on-going support they need as we continue with the consultation. pladis is home to some of Britain’s best loved brands which have been part of the fabric of our society for nearly two hundred years. In order to protect them for generations to come, we must take steps to address excess capacity in the UK.”
A counter-proposal prepared by a group including unions, the Scottish Government and Glasgow City Council, outlined a new factory could be built near the existing site at a cost of just over £50m.
It claimed that closing Tollcross would cost pladis, over £30m, factoring in costs such as redundancies. Sale of the Tollcross site for housing could also raise £2m.
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