Coats Viyella to cut jobs in move overseas

MAGNUS GRIMOND

Coats Viyella, Britain's biggest textile group, yesterday warned of UK job losses after announcing it would accelerate the transfer of production outside the UK.

The company unveiled a pounds 50m restructuring provision as part of plans to cope with the phasing-out in 2002 of the Multi-Fibres Agreement, the multilateral trading arrangement which imposes textiles production quotas on developing countries to protect higher-cost Western producers. The programme is expected to deliver pounds 10m lower costs this year, rising to pounds 37m after 1997.

Neville Bain, chief executive, said the group's world-wide workforce of 74,000, including 28,000 in the UK, would be affected by the restructuring, which would mean some plant closures, although the majority of the jobs would be lost overseas. He refused to elaborate on numbers in advance of informing the employees. "We have announced [this restructuring] early, but what we have not done is talk to the people involved on the sites concerned."

He denied the move was in anticipation of a Labour government bringing in a statutory minimum wage, which could hit the textile industry.

However, he agreed that any measure that affected UK competitiveness would be harmful to employment here "and must accelerate the trend offshore".

It is thought that around 80 per cent of the charge will cover redundancy payments. But the money will not be evenly distributed. In India, where the group would like to see the 14,000 workforce cut to nearer 8,500, the cost of an individual redundancy is around pounds 2,000, compared with over pounds 20,000 in Europe. However, Coats is restricted in the sub-continent by laws which prevent compulsory redundancy.

Mr Bain said one of the main drivers behind the restructuring was the need to speed up the move to offshore sourcing in advance of the end of the Multi-Fibres Agreement.

Coats shares fell just 1p to 199p yesterday. The group also announced a 6.4 per cent dip in underlying profits to pounds 143m, before provisions and losses on the disposal of businesses. Analysts cut forecasts for this year by around pounds 30m to between pounds 130m and pounds 140m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most