Bethan Jenkins AC/AM Blog

THE loss of 225 jobs at TRW Automotive in Resolven represents a personal tragedy for those involved, and a fresh economic calamity for the Neath Valley and surrounding areas.

There was a time – and not that long ago – when thousands of workers in and around Swansea were employed in the automotive industry, with three employers in particular – Ford in Swansea, TRW Automotive, and Lucas in Ystradgynlais – providing the kind of secure grandfather to father to son career path that marked out Welsh and British engineering.

Those days are long behind us. What really did for them was globalisation – or, rather, the possibilities for savings that globalisation presented to these big manufacturers. Why pay generous, Western economy-level salaries with final salary pension schemes when you can produce the same for around a third of the price in the developing world without the inconvenience of pay (and conditions) bargaining unions?

Ford were among the first to glimpse the opportunities. Talk to the former Visteon workers and they will tell you their view that the chance to dump its pension obligations was an added benefit for Ford when it spun its parts business out and created Visteon. The intention was to move away from the ‘wooden dollar’ system, where the cost of a part was included in the price of the car, towards an internal market, in which plants across the world would compete against one another – often in the same company – for contracts. Rising skills levels in emerging economies made this possible.

From the outset, Ford didn’t give Visteon UK a chance. It forced on the new company the pay and pension contributions it was committed to with staff that transferred from Ford to Visteon UK, and within three months asked it to reduce its prices by a third. Of course, Visteon UK played a significant part in its own demise, but that’s another story.

But the legacy of such profit maximising leaves a reservoir of now-unused, highly-skilled engineers in and around Neath and Swansea. What do we do with these workers? Do we expect them to work in Starbucks, or in another multinational service industry business? What real benefit does that bring the local and Welsh economies when profits are delivered to shareholders outside of Wales? How does it encourage economic development when important decisions are taken in boardrooms in the US, or France, or London (assuming they are decided at boardroom level)?

TRW Automotive now joins this automotive tradition. It simply isn’t enough that we look to encourage new businesses into the areas where such companies have closed up shop. It’s about matching up workforces with requirements and retaining a degree of control so that we can manage and grow the Welsh economy.

I asked, during a short debate on Visteon back in April, whether we want companies like Ford in Wales. When Linamar announced its closure earlier this year, workers there told me that Ford had lifted not a finger to help. The company has received millions from both the UK Government and the Welsh Assembly Government so that it can build its Ecotec engine in Bridgend, but none of the components will be sourced in Wales. In short, Ford controls its involvement in the economy to its own end, which can be quite some way from what is good for the welsh economy.

Both TRW Automotive and Visteon/Linamar boasted workers that could produce components that couldn’t be built anywhere else in the world. That has to count for something when we are marketing our skills.

I would like to see the creation of indigenous businesses whose roots in Wales would leave them more attuned to the economy, culture and traditions of this country. We simply don’t have enough world-beating businesses. Why do we not have a Scottish Power, for example? Wales is crammed with energy possibilities, from carbon fuels to renewables. Sure, there are variables, like being able to invest in a delivery network, but if Scotland can manage it, why can’t Wales?

On a personal level, it simply isn’t good enough to “retrain” proud and time-served engineers as baristas. Having purpose in work has been proven to bring benefits for communities, and businesses that lay down proper roots, that bring to the communities in which they are situated prosperity – real prosperity, as opposed to 30-odd low-skilled positions, deliver benefits in other ways, too.

We now have the opportunity with the Economic Renewal Programme, we have a real opportunity to move away from the mistakes of the past, to re-purpose our economy in a way that brings long-lasting and meaningful benefit.

So we know the problem, and the goal. I’d be interested in hearing, from businesses and elsewhere, how we can get there.