§ 10.28 p.m.
§ Mr. Leslie Huckfield (Nuneaton)
I am grateful for the opportunity of raising what I consider to be a very important matter which certainly affects large numbers of my constituents, namely, the future of the Triumph Motor cycle factory at Meriden, near Coventry. I begin by saying that I am a member of the Transport and General Workers' Union and that the majority of the workforce are members of the union. Consequently, I have been closely involved with developments at Meriden through the Coventry and district organiser, Mr. Bill Lapworth, and the works convener, Mr. Denis Johnson.
This is an interest which the Minister knows I have followed closely since he 1415 initially made a statement to the House on 19th March announcing that he intended to inject £4.8 million of Government money under the Industry Act to strengthen the British motor cycle industry, as he put it—an industry which, after all, exports 90 per cent. of its output. This was when we at Meriden felt that if any rationalisation were to be done, if there were to be any reorganisation, Meriden would not suffer. We thought Meriden would be the last place to be affected, particularly because we have always been convinced that at Meriden we have a viable, economic motor cycle factory, provided that it was allowed to stand on its own feet and not be weighed down with the overheads of the rest of the BSA group.
We came to this conclusion but were not alone in doing so, because the recommendations of Cooper Brothers, the independent accountants, also suggested that the best plan for the salvation of the BSA group was to concentrate output and assembly at the Meriden factory. I realise that the Minister may refer to the PSA report, which recommended concentration elsewhere. But the main conclusion on both the PSA and the Cooper Brothers reports was that this is an industry where overheads have to be commensurate with the level of output.
We have always felt that if we could cut the Meriden overheads to a level commensurate with the Meriden output we would have a viable factory, a going concern. It is true that in the reorganisation of 1971—for which I am not blaming the Minister—when the noble Lord, Lord Shawcross assumed the chairmanship of the company and 3,000 workers were made redundant at the Small Heath works, we felt that some of the overheads were transferred to Meriden, together with some of the office staff from Small Heath, thus adding even more to the burden of BSA overheads at Meriden.
It has been said that one of the difficulties of the Meriden plant is the high break-even point. I know that figures have been attested by Mr. Dennis Poore that the break-even point of Meriden is high. I have even heard the figure of 44,000 motor cycles quoted. That may be the figure if we take into account the 1416 total overheads of the BSA group. We could certainly produce evidence from former managers of the factory that the break-even point is as low as 28,000 motor cycles a year. It is along these lines that Bill Lapworth and the workers and I feel that Meriden can be made viable. It was on this basis that, after the closure had been announced on 14th September, Bill Lapworth and I got a unanimous mandate from the total work force at a mass meeting to negotiate with Mr. Poore for the possible acquisition of the plant and its operation with worker co-operation.
Our mandate was on behalf of the whole work force and not just from members of the TGWU, our own union. It was to negotiate for the acquisition of the factory. It is worth stressing that, because when the negotiations came down to detail Mr. Poore and the workers' side understood that the detailed negotiations at the plant would always have to be concluded by local trade union officials. The significant thing in the negotiations we conducted—and the Minister understands this full well now—was that the men were determined to keep the plant open.
I suppose that they had the option of accepting some kind of redundancy pay and perhaps some addition to that. In turning that down they opted to keep the plant open, for two reasons. The first was that they wanted time to be given for the formulation of more precise details about worker participation—and, after all, it was Mr. Poore, in our preliminary negotiations of 7th October, who said that we should need more time to put our proposals forward. Perhaps the main reason why the workers decided to fight to keep the plant open was that they realised that, above all, the American market required continuity.
In the United States many American dealers in Triumph motor cycles have had reduced supplies for the past two years. Many of them even face law suits now, because they are not able to supply customers with a complete range of parts and services. Above all, they need bikes for their peak sales season, from next January to March. It is because they realised that the name "Triumph" had to be protected, and, in essence, that the whole of the British motor cycle industry's reputation had to be protected, that 1417 the men opted to keep the plant going for as long as possible. At the back of their minds, too, was the fact that approximately 225 of the 648 exclusive dealers in the States faced the possiblity of bankruptcy if they were not able to get bikes, because many of them had taken out overdrafts on the strength of receiving bikes. Only a couple of days ago, when I was talking to Washington on the telephone, I received information that one or two dealers have had seriously to consider the possibility of turning their stores into parking lots.
Though the men were determined to keep the factory open so that we could get the proposals for our co-operative off the ground, and though they wanted guaranteed continuity for the American market, one of the difficulties in the negotiations with Mr. Poore was the fact that we were unable to arrive at a precise understanding about the value of the name "Triumph", and we also had difficulty in getting access to Mr. Poore's company's books, although he himself had said that we would want to see them.
I think the Minister knows that every bike that Triumph makes can be sold in the States. There is no difficulty about that. The determination of the Triumph dealers was expressed when Mr. Bob Myers, one of the top 10 American dealers, from just outside Washington, came to this country and met the Minister, and Mr. Poore, and was certainly active in some of the earlier negotiations which we had to keep the plant going. In fact, it was with his help that I had been in touch with a very respresentative sample of American dealers from coast to coast, and, on the basis of 20 contacts made by telephone and otherwise, had come back from the United States in the middle of October with orders for about 5,000 bikes for our co-operative and, ultimately, the possibility of well over £500,000 to set up a new dealers' distribution corporation in the United States, which would be headed by Mr. Denis McCormack, who was the first president of the Triumph Corporation in the States and whose name still means a great deal in motor cycling circles in North America. I say this to the Minister as evidence of the fact that there is very a serious market—an almost guaranteed market—for Triumph bikes in the States. What we were certainly keen to prevent was 1418 the acquisition of a complete monopoly by Honda and other Japanese dealers, who, as I am sure the Minister already knows, have a quite frightening percentage of the American home market.
In our proposals for a workers' cooperative we have always had a range of options. At one end of the range we had the possibility of negotiating an operation under which we might manufacture under licence from Mr. Poore, who might handle the distribution. At the other end of the range we envisaged the possibility of the complete acquisition of the factory, originally using some of the workers' redundancy money. As the Minister knows, largely as a result of his intervention we have now been given the chance to pursue at least one of the options, and I hope that we shall have the opportunity to move to the other end of the range.
We at Meriden are very grateful for the way that the Minister intervened last Friday to call both sides together, and for the great deal of time that he spent in the negotiations at his Ministry between both sides in the issue. I ask him tonight to continue to take the personal interest which he has hitherto taken in this matter. We are very grateful for the interest which he has shown so far. We only hope that he will continue to do that. We also hope that either he or his civil servants or representatives will continue to be present in the negotiations which are still proceeding. As the right hon. Gentleman knows, one of those representatives was certainly present at his office yesterday, when negotiations went on for a long time. We hope that that presence will continue, although, of course, negotiations which have taken place at Kitts Green and Meriden today have been of a somewhat different nature and in those circumstances that presence is not so important.
At this late stage I ask the Minister not to dismiss completely the possibility of some kind of further monitoring of Norton Villiers Triumph. I hope the right hon. Gentleman has not dismissed entirely the possibility of having a Government director on the board of NVT, and that he and his Department will maintain a watchful eye on what is happening to the £4.8 million which he originally injected.
The latest information I have is that about 850 workers have already signed 1419 on to work in our co-operative and we still want to go ahead on the original proposals, which included the election of representatives and the system being run on a fully democratic basis. I have been unable to discover the latest stage of the negotiations but the Minister knows that the key issue in our talks yesterday was the negotiation of a price at which we would sell our motor cycles from Meriden to Mr. Poore for marketing and distribution.
I can only say that we want the chance to succeed and we are grateful for having been given a start. We know that Meriden is the place where the legend of Triumph and motor cycling began. We feel that if we can succeed in setting up our co-operative and show that workers can run a factory, and if we can maintain the reputation of Triumph and keep the reputation of the British motor cycle industry to the forefront, we shall not only have preserved the legend of Triumph but shall, perhaps, have erected a milestone in the history of the British working class movement.
§ 10.43 p.m.
§ The Minister for Industrial Development (Mr. Christopher Chataway)
I am grateful to the hon. Member for Nuneaton (Mr. Leslie Huckfield) for -giving me the opportunity to reply to what he said about the motor cycle industry and the problems of Meriden. It is true that as both a member of the Transport and General Workers' Union and a Member of Parliament, with a large number of constituents employed at the Meriden works, the hon. Member has taken an extremely active and close interest in this matter over the last few months.
My hon. Friend the Member for Meriden (Mr. Speed) is a member of the Government and, as the House will understand, is therefore not able to play as public a rôle, but he has kept in very close touch with me and has been deeply concerned about the future of the company.
The hon. Member for Nuneaton recalled that on 19th March I announced that, subject to satisfactory arrangements being made, the Department was prepared to support the merger of the motor cycle interests of BSA with the motor cycle manufacturing subsidiary of 1420 Manganese Bronze Holdings—Norton Villiers—in a new company. Our object in doing that and and our purpose in agreeing to inject about £4.8 milion into that company was to secure this country's motor cycle industry—an industry which exports a substantial amount each year.
Nobody had suggested that it would be easy to reorganise the industry and put it on a viable footing. Following the merger of the new company NVT had three motor cycle factories—the former BSA factories at Small Heath, Birmingham, and at Meriden near Coventry, and the former Norton Villiers factory at Wolverhampton. From 1971 the assembly of Triumph motor cycles had been concentrated by BSA at Meriden, at the cost of major redundancies at Small Heath. As the hon. Gentleman has rightly recalled, there were conflicting reports from different consultants as to which way the concentration should go, but from that time Small Heath made three-cylinder engines for motor cycles assembled at Meriden and a limited number of specialist off-road machines, and did some finishing of parts for Meriden.
It was clear that if the objectives of strength and competitiveness for a revived British motor cycle industry were to be achieved there would need to be reorganisation and rationalisation. The new board of Norton Villiers Triumph came to the conclusion that it should concentrate motor cycle manufacture at Small Heath and Wolverhampton, and that it had no option but to close the Meriden factory. It came to that conclusion because it believed that there was no other way in which it could produce a viable motor cycle industry.
In announcing its decision NVT drew attention to the fact that the BSA motor cycle business, as a whole, had suffered a loss of £4 million in the year ended 31st July 1973 and that the losses were continuing. It was understandable that there should have been a strong reaction from the Meriden work force to the announcement. I appreciate that when the earlier announcement of a merger between BSA and Norton Villiers was announced those at Meriden must have felt that their future was secure. I know about the pride which is taken in the Triumph machine by the Meriden work force. That is absolutely right.
1421 Unfortunately, as we all know, what ensued from the announcement of an intention to close was a work-in which subsequently became a sit-in. It is a dispute that has gone on for a long time. It is a dispute in which losses have been sustained by both sides—the company and the work force. The company has lost production which could have been sold in the American market. The hundreds of former employees who have gone to find other jobs have done so, as the hon. Gentleman said, without a redundancy settlement being negotiated to supplement basic redundancy pay. All employees have lost wages.
Like most industrial disputes, this is certainly not one which either side will win. It is no part of my purpose to try to apportion blame for the failure over the past few months to come to an agreement. I know that the hon. Gentleman is as anxious as I am to look to the future and try to ensure that an agreement is reached as soon as is humanly possible.
The hon. Gentleman referred to the meeting last Friday, to which I invited both sides. That meeting was attended by Mr. Harry Urwin the Assistant General Secretary of the Transport and General Workers' Union. Mr. Urwin played an active and constructive rôle in the talks that took place. At the meeting it became clear that the work force had two objectives. Its first was to try to ensure that as many people as possible should be re-employed. Its second was to have the opportunity to try to purchase the factory and the plant, in due course to find a backer to enable them to do so, and perhaps to continue, once they had purchased it, as a workers' co-operative.
The management had the objective, first, of securing the completed motor cycles from the Meriden works and finishing off the part-completed ones, and, secondly, of continuing production at Meriden for some time in order to meet the very considerable demand in the American market. I agree with the hon. Gentleman that there is a possibility of selling large numbers of machines there. Thirdly, the management wanted to secure the jigs and plans which at the moment are inside the Meriden factory, because these are essential to the continuation of work at Small Heath and the development of NVT.
1422 There had been discussions between the two parties over the previous weeks. It had become clear to the management that a limited number of people could be employed at the factory at that time, and the major dispute between the two sides when the meeting began was about the number of people who might be brought back into employment.
The difficulty was the supply of components. About a fortnight before, the management had made an offer to the work force to take back, as a minimum, 250 people, to work for a minimum period of three months. The work force felt that this was an inadequate number. The proposal that therefore emerged during this meeting was one under which, as a short-term measure, a company would be formed on behalf of the work force, the men would go back to work on two-cylinder motor cycles and spares, selling them to NVT, after which the work force, as represented by the new company, would have the option, for a limited period, to purchase the plant and the factory at the end of the interim period.
The advantage of this to the work force was accepted as being, first and foremost, and immediately, that they could decide how many people there was work for—how many people could profitably go back to work on the machines on the basis of the supplies that were forthcoming. Secondly, it had the advantage of giving the opportunity for the work force fully to explore the possibility of continuing, on some basis, motor cycle production at Meriden.
For the management, the advantage of this arrangement appeared to be that it would enable the motor cycles and the jigs and plans from Meriden to be released. It would, therefore, enable NVT to continue with its plans for the reorganisation of the motor cycle industry. It would also secure employment in Small Heath, because it has become extremely important that these materials from Meriden should fairly shortly be released for the benefit of NVT as a whole.
I have hopes, therefore, that the details of this agreement can now be finalised between the two parties. As the hon. Gentleman said, a number of matters are still outstanding. The parties have to agree about the price that will 1423 be paid by NVT for the work done in the interim period at Meriden. The importance of reaching agreement will be clear to both sides, and there is not a great deal of time in which to do it. I am sure that there will be a real sense of urgency. On a matter such as this it would be possible to go on negotiating for a long time about the details. There have been losses to both sides as a result of this industrial dispute, and I believe that there is a willingness by both sides to come to an agreement.
I am grateful to the hon. Gentleman for the way in which he has spoken about this matter tonight. I know that he will share my hope that we shall shortly see an end to the dispute and progress being made to secure the opportunities available, both at home and abroad, for the motor cycle industry, particularly in the American market. 1424 Any assistance that he can give to speed the progress of these talks will be welcomed by all who are concerned in the motor cycle industry.
§ 10.57 p.m.
§ Mr. William Wilson (Coventry, South)
Representing, as I do, a Coventry constituency, I should like to say how grateful I am to my hon. Friend the Member for Nuneaton (Mr. Leslie Huck-field) for the great work that he has done in this matter. Triumph cycles, Triumph motor cycles and Triumph motor cars are synonymous with Coventry, and it would be a tragedy indeed if this great name went out of existence altogether.
§ Question put and agreed to.
§ Adjourned accordingly at three minutes to Eleven o'clock.