LG Philips Displays Redundancies

Presiding Officer, I would like to make a statement on the announcement by LG Philips Displays on 22 May that they were planning to close their Newport plant, making 870 employees redundant.

As soon as the company’s press notice was issued, I issued a statement to all Assembly Members expressing the Assembly Government’s extreme disappointment at the news.

Before turning to the closure itself and our work in helping those being made redundant, I want to refer to developments over the past few months.  

As many of you are aware, there have been rumours circulating about the future of the plant for some time.  Assembly Government officials have been in regular contact with the company since the original investment in 1997.  Towards the end of last year however it became clear that matters beyond local management needed to be addressed and I asked senior Assembly Government officials and the WDA to follow these up.  Two meetings were held with the Managing Director of LGPD Europe, and a third meeting was held with the Chairman and the Chief Executive Officer of LGPD in Hong Kong.  At those meetings, the difficulties in the picture tube market were discussed, and the company was urged to consider introducing other products at Newport.

As soon as we became aware that a decision was imminent, I wrote to Andreas Wente, Chairman and CEO of LGPD to express my disappointment at the company’s decision and to ask him to reconsider the company’s position.

Mr Wente’s response to me, and the company’s statement, makes clear that the decision was due to the global economic environment, and the impact the television and computer monitor tube markets had had on the company.  Attempts were made by the company last year to broaden the product portfolio of the Newport plant, but this did not bring about a turnaround in its operations.

Mr Wente also assured me that the decision in no way reflects on the performance of the plant or the employees, who have consistently shown great commitment over the years.

We are aware that the company has already closed plants elsewhere in Europe, and the announcement on 22 May also referred to the closure of a plant at Southport.

The planned closure does not affect the adjacent LG Electronics Wales plant, which assembles monitors and computers, for which demand continues to increase. This plant currently employs 430 people.

We are also, through the WDA, in contact with the suppliers to the LGPD plant and we are keeping a close eye on their position.

The immediate task is to ensure that the employees receive every possible assistance in finding alternative employment, and following my letter to Mr Wente I received an assurance from him that the company will indeed co-operate fully with Team Wales agencies in helping staff find new employment.  We understand that 800 employees will leave at the end of the 90 days consultation period, on 20 August.  Decommissioning will then begin at the plant and the remaining 70 staff will leave when this has been completed at the end of the year.

The company has appointed an outplacement agency to assist the redundant workers. There have already been two meetings with the Team Wales agencies – the WDA, Jobcentre Plus, ELWa, Newport County Council and Careers Wales – and an action plan has been agreed on the way forward.  I have also personally been in contact with the trade union, AMICUS, about the position to ensure their involvement in this process. An information centre is being established on site and advice for individuals will begin in the next day or so.  We shall monitor the situation carefully to ensure that the employees get every possible assistance.

I reiterate that the Assembly Government is extremely disappointed at the company’s decision and our thoughts and actions are with those made redundant and their families.

Nevertheless, we are aware that it is a well-trained workforce and, despite this setback, the overall position of the electronics sector and the labour market in that part of Wales is good.  I shall be visiting a number of electronics companies in the area later this month.  Several companies have already made the employees aware of vacancies and the process of identifying suitable alternative employment will intensify over the coming weeks and months.

We are therefore reasonably confident that most of the employees will be able to find employment relatively quickly.  We will be working with the company, the trade union and the Team Wales support agencies to ensure that this happens.