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The impact of large scale redundancies in the East of Scotland. ESEP Seminar Callendar House, Falkirk 26 November 2003. 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

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the impact of large scale redundancies in the east of scotland

The impact of large scale redundancies in the East of Scotland

ESEP Seminar

Callendar House, Falkirk

26 November 2003

objectives
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
today s programme
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
slide4

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
presentation
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
the pace framework
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
incidence of redundancy
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
redundancies per 1000 employees uk 1992 2000
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%)
motorola and nec large site closures
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
impact on the west lothian economy
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
workforce characteristics motorola
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
workforce characteristics nec
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
where employees came from
Where employees came from

Lothian

1650 (36%)

Other

1190 (26%)

Lanarkshire

1750 (38%)

of which

W Lothian

1420 (31%)

N Lanarkshire

1220 (27%)

local people

2640 (58%)

impact on west lothian residents
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
impact on north lanarkshire residents
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
redundancies relative to claimant count stocks
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

local impacts of the motorola and nec closures summing up
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
redeployment outcomes motorola
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
redeployment outcomes nec
Redeployment outcomes: NEC
  • after 6-12 months:
    • 80% employed/self-employed
    • 7% in FE/training
    • 5% not seeking work
    • 8% unemployed
employment outcomes analysed
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
cameo studies
Cameo studies
  • Longannet, Fife
  • BP, Grangemouth
  • Grampian Foods, Edinburgh
  • Levi Strauss, Dundee
longannet colliery
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
longannet the outcome
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
bp grangemouth
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+
bp progress to date
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
grampian foods lothian
Grampian Foods, Lothian
  • 550 redundancies
  • May 2002 – Feb 2003
  • workforce deemed high risk
  • 51% aged 25-45
  • 65% lived in Lothian
grampian foods the outcome
Grampian Foods: the outcome
  • 61% response to tracking exercise
    • 84% employed
    • 10% inactive
    • 5% unemployed
    • 33% earning higher wages; 47% earning less
levi strauss dundee
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
levi s one year on
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
the impact of large scale redundancies in the east of scotland44

The impact of large scale redundancies in the East of Scotland

ESEP Seminar

Callendar House, Falkirk

26 November 2003

local impacts of redundancies the historical record
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
redundancies in large integrated labour markets
Redundancies in large integrated labour markets
  • effects dispersed across the labour market
  • localised impacts difficult to see a few years down the road
other factors affecting local impacts
Other factors affecting local impacts
  • state of the local labour market
  • characteristics of the employer
  • characteristics of the redundant workers
the impact of large scale redundancies in the east of scotland48

The impact of large scale redundancies in the East of Scotland

ESEP Seminar

Callendar House, Falkirk

26 November 2003

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