HC Deb 27 May 1982 vol 24 cc1044-7
6. Mr. Michael McNair-Wilson

asked the Secretary of State for Northern Ireland if he will make a statement about progress with the receivership of the De Lorean Motor Company.

Mr. Adam Butler

The joint receivers and managers of De Lorean Motor Cars Ltd. announced on 24 May that they were suspending production of cars in Belfast and would make almost all of the employees redundant on 31 May. They made it clear that in their view these decisions were unavoidable because of the large stocks of unsold cars held in the United States of America and Belfast and the withdrawal by a potential investor of his interest in the business. They also stated that if, during the period that would be required to prepare for a realisation of the assets of the company any sound and viable proposals to reactivate the business should come forward, they would consider reopening the plant.

Mr. McNair-Wilson

Will my hon. Friend tell me what is the exact status of the company as from 31 May? Does it effectively close down or does it remain on a care-and-maintenance basis with the possibility of reactivation? How much public money is likely to be lost if the company is closed down? Will the company be freed from the American parent, which seems to have bedevilled the negotiations? Will the 4,000 unsold cars belong to Belfast or New York and, if they belong to Belfast, will they be considered as assets of DMC Belfast?

Mr. Butler

I shall attempt to answer at least some of my hon. Friend's questions. The state of the company is exactly as set out in the answer that I gave. The receivers-managers have decided that they must make preparations for realising the assets of the company. That process will take some time. If, in the meantime, serious bids come forward—one from the United Kingdom is being investigated at the moment—the managers will see whether such a bid will lead to a viable future for the company. If so, they will be prepared to reconsider opening the plant. In the meantime, it had been their intention to keep on a number of employees on the shop floor, as well as staff, so that in the event of an early bid that proved worth considering the plant could be reopened in a satisfactory condition. The steps that are being taken by the work force at the moment mean that unless the situation changes it will not be possible to keep on people on the shop floor, which would make it more difficult for the plant to be reopened. We believe that there are about 3,000 unsold finished cars, other than those in dealers' showrooms. About two-thirds of those belong to the parent or marketing company—DMC—and about 1,000 belong to DMC Ltd., the Belfast company.

Mr. Molyneaux

In addition to doing everything possible to safeguard the interests of the work force, will the Minister remember the plight of the creditor companies that have been caught up in this disaster?

Mr. Butler

Both the trade creditors and the work force stand to gain most from the reopening of the plant. That is clear. That is why the receivers, with the encouragement of the Government, have kept the plant in operation for the past three months. Because none of the interests expressed has come to fruition, they have decided, correctly, to suspend production and to set about preparing for the realisation of the assets. If that were to occur, the receivers and managers have made it clear in statements that the trade creditors would be likely to receive little or nothing.

Mr. Cryer

Does the Minister accept that if the assets are sold they will be let go at virtually scrap prices? The taxpayer has poured in many millions of pounds' worth of money? Does the Minister agree that the wisest thing to do with the plant would be to take it over, develop the car, which has been paid for by the taxpayer, as a public enterprise, prepare cars for the European market, give the workers who are sitting-in in desperation a proper basis for full public ownership and remove the firm from the clutches of what is, at best, a controversial entrepreneur?

Mr. Butler

The Labour Government of whom the hon. Gentleman was a member undertook this hazardous project. The hon. Gentleman is now advocating further expenditure of public money on a project that is demonstrably non-commercial, because private interests have not been prepared to put their money into it.

Dr. Mawhinney

Does my hon. Friend agree that the current behaviour of some of the work force, whatever the provocation, will act as a severe disincentive to people who might otherwise wish to invest money in the Province and perhaps even in the company?

Mr. Butler

My hon. Friend is right to refer to provocation, because the shock to the work force at Dunmurry must have been considerable. On the other hand, I must tell the work force that, whatever the shock and unhappiness, that does not justify its present action. My hon. Friend is absolutely right. So long as the sit-in continues, and particularly if the members of the work force insist on preventing spare parts and components from leaving the plant—which could provide for further car sales in the United States—they will prejudice further realisation of the assets.

Mr. Fitt

Does the Minister agree that the provocation, which has led to the takeover of the factory by the work force, was brought about because of the cavalier attitude of the Government and the receivers in refusing to discuss with the trade union representatives the tragedy that was about to take place, bringing with it such tragic redundancies? Does the Minister agree that, as most people were able to envisage what would happen, it would have been less hurtful if the Government had taken the opportunity to discuss with the representatives of the work force what was likely to happen?

Mr. Butler

I cannot agree with what the hon. Gentleman says. In no way can the behaviour of the receivers and managers be said to be cavalier. They have continued to run the plant for three months, trying to find a bidder for it, without success. I remind the hon. Gentleman, many of whose constituents work at the plant, that they have been paid for a three-day week over the past month, but have worked for only one day a week.

Mr. Concannon

Does the Minister accept that I should have liked to see as much thinking about the company while it was open and selling cars as there has been over its closure? Does the Minister further accept that the Opposition regard the shut-down of the De Lorean project as a tragedy for Northern Ireland? Does he acknowledge that the shut-down has great consequences for the economic future of the Province? That has already been shown by the Hyster company's decision to set up a factory in Dublin rather than in Antrim, because of a lack of confidence in the Government's economic policy. Does the Minister realise that if that firm had slipped through my fingers from the North to the South when I was i he Minister responsible for commerce in Northern Ireland my right hon. Friends the Members for Leeds, South (Mr. Rees) and for Barnsley (Mr. Mason) would probably have sacked me on the spot?

Mr. Butler

There is no connection between the decision of Hyster to go to the Republic and the difficulties of De Lorean. Hyster is a sound company and has demonstrated in Northern Ireland that it is possible to manufacture satisfactorily and make profits. The company that was launched on its way by the right hon. Gentleman's Government was a high-risk company with demonstrably non-commercial prospects. It was a risk that the right hon. Gentleman was prepared to take in Northern Ireland. Unfortunately, it has not paid off.