the impact of large scale redundancies in the east of scotland esep seminar callendar house, falkirk...
TRANSCRIPT
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The impact of large scale redundancies in the East of
ScotlandESEP Seminar
Callendar House, Falkirk26 November 2003
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Objectives
• to examine the impact of 2 large scale redundancies on the local labour market– Motorola and NEC
• to present cameo studies of other major redundancies
• to review the implications for policy makers, and identify possible interventions
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Today’s programme
• 10.30 Welcome: Gordon McLaren• 10.40 Presentation: John Lord• 11.10 Commentary: Alan McGregor• 11.30 Break• 11.45 Focus groups• 12.30 Feedback and discussion: Alan
McGregor• 13.15 Closing remarks: Gordon McLaren• 13.30 Lunch
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ESEP labour market service
• launched January 2002 • labour market information service for ESEP
and its partners• principal output - major annual report:
www.esep.co.uk
• ad hoc reports and services: ERDF/ESF-funded community development
projects strategic sector profiles
• autumn seminars
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East of Scotland Programme Area
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Presentation
• policy context: the PACE framework• incidence of large scale
redundancies• case studies: Motorola and NEC
– scale and phasing– labour market context– impact on the claimant count– redeployment outcomes
• cameo studies from the ESEP area
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The PACE framework• a national framework for local
agencies to create effective and flexible mechanisms to identify and respond to redundancy situations
• precautionary planning and redundancy response
• local response teams
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Incidence of redundancy
• about 8 employees in a 1,000 (<1%) were made redundant in 2000-01– but twice that in manufacturing
• about 13% of employees changed employer in the year to 2001– mobility greatest among the young, single,
people with level 2 qualifications, workers in the private sector (especially small firms)
– median job tenure in the UK 4 years
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Redundancies per 1000 employees, UK (1992-2000)
• Redundancy rates are increasing in the manufacturing sector in the UK (1.6%) and falling in the service sector (0.5%)
0
5
10
15
20
25
30
1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: Office of National Statistics
Services Manufacturing Other
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Losses and gains reported in the press since Jan 2001
LEC area Jobs lost Jobs gained
Edinburgh & Lothian
10452 2672
Fife 3775 3091
Forth Valley 2482 1682
Grampian 2141 1634
Tayside 2750 1510
Total ESEP 21600 10589
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Motorola and NEC: large site closures
• Motorola, Bathgate– 3100 redundancies– April – December 2001(9 months)
• NEC, Livingston– 1500 redundancies– August 2001 – December 2002 (16 months)
• total– 4600 redundancies– April 2001 – December 2002 (20 months)– most in the year to April 2002
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Impact on the West Lothian economy
• in 2001, there were 69,000 employees in employment– of which 17,000 were in manufacturing
• the Motorola and NEC closures resulted in 4,600 job losses, equivalent to:– 7% of all employment– 27% of manufacturing employment
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Workforce characteristics: Motorola
– 2/3 male– 2/3 aged 25-44– 2/3 semi-skilled/process workers– 90% employed for 3 years +– 21% qualified to L4 or over, 25% L3– …43% no post-school qualifications– motivated and able workforce– high productivity/quality environment– culture of training and development
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Workforce characteristics: NEC
– 2/3 male– 78% aged 25-44– 36% operatives, 21% technicians, 17%
engineers– 75% employed for 3 years +– 21% qualified to L4 or over, 21% L3– …46% no post-school qualifications– motivated and able workforce– high productivity/quality environment– culture of training and development
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Where employees came from
Lothian1650 (36%)
Other1190 (26%)
Lanarkshire 1750 (38%)
N Lanarkshire 1220 (27%)
W Lothian 1420 (31%)
of which
local people 2640 (58%)
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Residents working in manufacturing as % of all
employees
0
5
10
15
20
25
Feb 0
0
May 0
0
Aug 0
0
Nov 0
0
Feb 0
1
May 0
1
Aug 0
1
Nov 0
1
Feb 0
2
May 0
2
Aug 0
2
Nov 0
2
Feb 0
3
May 0
3
Aug 0
3
Source: Labour Force Survey
Scotland North Lanarkshire West Lothian
Redundancy phasing period
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Impact on West Lothian residents
• 1,420 West Lothian residents were made redundant
• in 2001, there were 82,000 West Lothian residents in employment– of whom 16,000 were in manufacturing
• the scale of redundancies was equivalent to:– 1.7% of all West Lothian residents in
employment– 8.9% of those employed in manufacturing
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Impact on North Lanarkshire residents
• 1,220 North Lanarkshire residents were made redundant
• in 2001, there were 144,000 North Lanarkshire residents in employment– of whom 22,000 were in manufacturing
• the scale of redundancies was equivalent to:– 0.8% of all North Lan residents in employment– 5.5% of those employed in manufacturing
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Redundancies relative to claimant count stocks
• between April 2001and Dec 2002, the average number of claimants in each area was:– West Lothian: 3000
1420 redundancies = 47% of claimants– North Lanarkshire: 7750
1220 redundancies = 16% of claimants
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Redundancy phasing
0
200
400
600
800
1000
1200
Apr-
01
May-0
1
Jun-0
1
Jul-
01
Aug-0
1
Sep-0
1
Oct
-01
Nov-0
1
Dec-
01
Jan-0
2
Feb-0
2
Mar-
02
Apr-
02
May-0
2
Jun-0
2
Jul-
02
Aug-0
2
Sep-0
2
Oct
-02
Nov-0
2
Dec-
02
No.
mad
e r
ed
un
dan
t each
mon
th
NEC Motorola
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Redundancies by local authority
0
50
100
150
200
250
300
350
Apr-
01
May-0
1
Jun-0
1
Jul-
01
Aug-0
1
Sep-0
1
Oct
-01
Nov-0
1
Dec-
01
Jan-0
2
Feb-0
2
Mar-
02
Apr-
02
May-0
2
Jun-0
2
Jul-
02
Aug-0
2
Sep-0
2
Oct
-02
Nov-0
2
Dec-
02
North Lanarkshire
West Lothian
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Redundancies per month relative to claimant count
stocks
0%
2%
4%
6%
8%
10%
12%
Apr-
01
May-0
1
Jun-0
1
Jul-
01
Aug-0
1
Sep-0
1
Oct
-01
Nov-0
1
Dec-
01
Jan-0
2
Feb-0
2
Mar-
02
Apr-
02
May-0
2
Jun-0
2
Jul-
02
Aug-0
2
Sep-0
2
Oct
-02
Nov-0
2
Dec-
02
As % of claimant count stock in West Lothain As % of claimant count stock in North Lanarkshire
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Claimant countstock
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Feb-0
0
Apr-
00
Jun-0
0
Aug-0
0
Oct
-00
Dec-
00
Feb-0
1
Apr-
01
Jun-0
1
Aug-0
1
Oct
-01
Dec-
01
Feb-0
2
Apr-
02
Jun-0
2
Aug-0
2
Oct
-02
Dec-
02
Feb-0
3
Apr-
03
Jun-0
3
Aug-0
3
West Lothian claimant count stock North Lanarkshire claimant count stock
Redundancy phasing period
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Claimant count rate index scale Feb 2000=100
50%
60%
70%
80%
90%
100%
110%
Feb-0
0
Apr-
00
Jun-0
0
Aug-0
0
Oct
-00
Dec-
00
Feb-0
1
Apr-
01
Jun-0
1
Aug-0
1
Oct
-01
Dec-
01
Feb-0
2
Apr-
02
Jun-0
2
Aug-0
2
Oct
-02
Dec-
02
Feb-0
3
Apr-
03
Jun-0
3
Aug-0
3
Oct
-03
Scotland North Lanarkshire West Lothian
Redundancy phasing period
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Claimant count on-flow
0
500
1000
1500
2000
2500
3000
3500
Feb-0
0
Apr-
00
Jun-0
0
Aug-0
0
Oct
-00
Dec-
00
Feb-0
1
Apr-
01
Jun-0
1
Aug-0
1
Oct
-01
Dec-
01
Feb-0
2
Apr-
02
Jun-0
2
Aug-0
2
Oct
-02
Dec-
02
Feb-0
3
Apr-
03
Jun-0
3
Aug-0
3
Oct
-03
North Lanarkshire West Lothian
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Claimant count off-flows
0
500
1000
1500
2000
2500
3000
3500
Feb-0
0
Apr-
00
Jun-0
0
Aug-0
0
Oct
-00
Dec-
00
Feb-0
1
Apr-
01
Jun-0
1
Aug-0
1
Oct
-01
Dec-
01
Feb-0
2
Apr-
02
Jun-0
2
Aug-0
2
Oct
-02
Dec-
02
Feb-0
3
Apr-
03
Jun-0
3
Aug-0
3
Oct
-03
North Lanarkshire West Lothian
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West Lothian redundant residents relative to on-
flow
0
200
400
600
800
1000
1200
1400
Apr-
01
May-0
1
Jun-0
1
Jul-
01
Aug-0
1
Sep-0
1
Oct
-01
Nov-0
1
Dec-
01
Jan-0
2
Feb-0
2
Mar-
02
Apr-
02
May-0
2
Jun-0
2
Jul-
02
Aug-0
2
Sep-0
2
Oct
-02
Nov-0
2
Dec-
02
West Lothian redundant residents West Lothian on-flow
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North Lanarkshire redundant residents relative to on-flow
0
500
1000
1500
2000
2500
3000
Apr-
01
May-0
1
Jun-0
1
Jul-
01
Aug-0
1
Sep-0
1
Oct
-01
Nov-0
1
Dec-
01
Jan-0
2
Feb-0
2
Mar-
02
Apr-
02
May-0
2
Jun-0
2
Jul-
02
Aug-0
2
Sep-0
2
Oct
-02
Nov-0
2
Dec-
02
North Lanarkshire redundant residents North Lanarkshire on-flow
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Proportion claiming 6+ months leaving count for work
(%)
0
10
20
30
40
50
60
70
80
Jan 0
0
Apr
00
Jul 00
Oct
00
Jan 0
1
Apr
01
Jul 01
Oct
01
Jan 0
2
Apr
02
Jul 02
Oct
02
Jan 0
3
Apr
03
Jul 03
Oct
03
North Lanarkshire West LothianLinear (West Lothian) Linear (North Lanarkshire)
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Proportion claiming 12+ months leaving count for
work (%)
0
10
20
30
40
50
60
70
80
Jan 0
0
Apr
00
Jul 00
Oct
00
Jan 0
1
Apr
01
Jul 01
Oct
01
Jan 0
2
Apr
02
Jul 02
Oct
02
Jan 0
3
Apr
03
Jul 03
Oct
03
North Lanarkshire West LothianLinear (North Lanarkshire) Linear (West Lothian)
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Local impacts of the Motorola and NEC closures: summing
up• 4,600 jobs lost in West Lothian
– most in the year to April 2002• 2,600 local people (WL/NL) lost jobs• some impact (?) on total claimant
count relative to Scotland– but a quick recovery
• no discernible shock in flows on and off– but proportion of LTU leaving count for
work has fallen in West Lothian
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Redeployment outcomes: Motorola
• after 6-9 months:– 63% employed/self-employed– 6% in FE/training– 7% not seeking work– 24% unemployed
• after 12 months:– 83% employed– 5% unemployed
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Redeployment outcomes: NEC
• after 6-12 months:– 80% employed/self-employed– 7% in FE/training– 5% not seeking work– 8% unemployed
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Employment outcomes analysed
• older workers find it harder to get a new job
• some transfer from full-time to part-time work– especially women
• a clear majority are now earning less– 68% ex Motorola, 69% ex NEC
• people have had to acquire new skills– and switch to different industries
• time makes a difference– redeployment rates improve after 6 months
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Cameo studies
• Longannet, Fife• BP, Grangemouth• Grampian Foods, Edinburgh• Levi Strauss, Dundee
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Longannet Colliery• 450 redundancies: Nov 2001 –
March 2002• some mining engineers, mostly
semi-skilled manual• large majority male• wide labour market catchment, but
focus on Fife/Forth Valley
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Longannet: the outcome
• one year on:– 65% in work or training– 4% claiming JSA– 20% claiming other benefits– 15% retired, moved away
• limited information on destinations:– supermarkets, bus drivers,
manufacturing
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BP, Grangemouth
• 1,000 redundancies in 2 phases, starting end November 2001
• 650 released to date• remainder to leave by end 2004• process workers and skilled trades• most live locally• 30% aged 45+
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BP: progress to date
• of the 650 released to date:– 17% redeployed by BP– 49% retired– 19% in employment– 4% started a business– 2% in FE
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Grampian Foods, Lothian
• 550 redundancies• May 2002 – Feb 2003• workforce deemed high risk• 51% aged 25-45• 65% lived in Lothian
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Grampian Foods: the outcome
• 61% response to tracking exercise– 84% employed– 10% inactive– 5% unemployed– 33% earning higher wages; 47% earning
less
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Levi Strauss, Dundee
• 460 employees– 41% response rate
• very stable workforce: 93% employed for 5 years+, 20% for 20 years+
• 59% live in a SIP postcode
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Levi’s: one year on
• 83% employed– most people in different occupations– a lot of churn over 12 months– more were in part-time occupations– average earnings sharply down
• 3% unemployed
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The impact of large scale redundancies in the East of
ScotlandESEP Seminar
Callendar House, Falkirk26 November 2003
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Local impacts of redundancies: the historical
record• where the employment base is
more specialised…– redundancy may affect a higher
proportion of the employment base– resulting in sustained higher levels of
unemployment– …and population loss, especially
among the young and more skilled– causing difficulties in attracting new
employers
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Redundancies in large integrated labour markets
• effects dispersed across the labour market
• localised impacts difficult to see a few years down the road
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Other factors affecting local impacts
• state of the local labour market• characteristics of the employer• characteristics of the redundant
workers
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The impact of large scale redundancies in the East of
ScotlandESEP Seminar
Callendar House, Falkirk26 November 2003