Where have all the good times gone?: What is to blame for the job losses - anything but the recession, managers tell David Bowen and Rachel Borrill
Sunday 04 October 1992
Townspeople had been expecting more like 600 job losses, but Mr Heseltine got the message. There is no prospect of a replacement for Trident: VSEL's workforce has been cut from 14,000 to 10,000 in the past three years, and the latest estimate for 1994 is 5,000. No one sees any reason to build more nuclear giants: Mr Gorbachev, not the recession, is to blame.
VSEL's cuts came in a week when 8,000 redundancies were announced. This does not compare with the great manufacturing bloodletting of 1980: in August that year, job losses were running at 20,000 a week; but so far into a very long recession, this week's news is very bad indeed. As with VSEL, though, 'recession' is rarely the sole reason, if managers are to be believed. Even as they make their cuts, they refuse to wallow in the gloom. Allied Bakeries sliced the workforce at its Bradford Sunblest bread factory by 65, closing one of its two lines, even though demand for bread has remained steady.
'We constantly have to review how busy our 25 bakeries are, and from time to time we have to close a line,' says Alan Richardson, a director.
'The overall workforce has probably been reducing slowly because of productivity improvements, but changes are taking place in both directions all the time.'
Other companies say they are responding to long-term trends or are trying to 'position themselves for the upturn'.
Cadbury is cutting 450 jobs, mostly from its Bournville site in Birmingham. Richard Frost, spokesman for Bournville, says: 'This has got nothing to do with Norman Lamont or the state of the pound, although nobody is immune from the recession. These job losses are to do with overhead costs: we are restructuring the company to make it leaner and fitter.'
Sears, which owns Selfridges and shoe chains Dolcis, Saxone and Freeman Hardy Willis, said it was closing 350 shoe shops, cutting 1,800 jobs over the next three years. The company made a loss in the first six months of this year, but Geoffrey Maitland Smith, the chairman, says that in the British shoes sector there are just too many shops: 'This is nothing to do with the recession.' He adds that Sears will be moving shops to out-of-town shopping sites.
'This is the future,' he says. 'The high street is almost dead.'
Boulton and Paul, a major joinery manufacturer and retailer, also put a brave face on its 387 redundancies. The company has been running at a loss because the housing market has collapsed; it is closing 18 sales centres and cutting back its factories, but, to David Chenery, chief executive, this is more than cost-cutting: it is a restructuring which 'will radically change the way we do business'.
Sarah Robey, managing director of the cosmetics firm Yardley, which ordered 50 redundancies at Basildon, has a similar line: 'We have a commitment to meet our customers needs and to develop a more effective organisation.' The company adds: 'The losses are a part of our restructuring, which has been going on for more than a year, as opposed to the recession.'
Research Machines, a computer company losing 120 people at Didcot, is operating in a growing market, and Gordon Durham, divisional director, says it has had 'a very buoyant year'. But it has been squeezed by the collapse in prices of computers, which is caused as much by developing technology as by the recession.
Changing technology is also blamed for 300 redundancies at Pirelli Cables' Bishopstoke site in Hampshire. Fernando Gonzalez, managing director, explains that the company's copper cables are losing out to optical fibres. The recession has increased the pressure but, he says, 'all the indications are that the reduction in demand will continue for the foreseeable future'.
It is almost a relief to find a manager who admits, as does Michael Rose, managing director of Butterley Bricks, that the 150 job losses he has announced are related solely to the recession. But even Mr Rose says that, after a multi-million-pound investment, Butterley 'is ideally placed to increase production'.
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