UK: Unions Slam Imperial Tobacco Closure As A ''Cynical Ploy'' to Retain Company Profits

Source from:  Nottingham Post (uk)  04/17/2014

Imperial Tobacco is facing a backlash after announcing it will close its Lenton factory and cut 540 jobs.

It claimed low sales and increased regulation had hit its profits. But it also blamed the growing illicit trade of cigarettes, with research claiming more than 780,000 counterfeit or smuggled cigarettes are smoked every day across Nottinghamshire alone.

The factory on Thane Road, in Lenton Industrial Estate, has been operating only at half capacity as a result – and will now become a victim of a changing industry, closing its doors by 2016.

The unions representing Imperial Tobacco workers, Unite and GMB, vowed to fight the closure and the move of production to Eastern Europe, calling it "a cynical ploy" to keep profits up.

Rhys McCarthy, national officer at Unite, said: "The company has callously decided to dump its UK workers and the only people who will be benefiting from this move are the shareholders and executive directors who will trouser even more money from this cost-cutting exercise once the dust has settled.

"It's another nail in the coffin for UK manufacturing and a loss of revenue for the exchequer."

Local MPs have also been shocked by the proposals.

Lilian Greenwood, Labour MP for Nottingham South, said she was already in conversations with Imperial Tobacco to see if the company can be persuaded to change its mind.

"Nottingham is a resilient city and I'm confident we can recover from this blow," she said. "I will be doing everything I can, together with the city council and other partners, to ensure that those affected receive all the help and support they need."

Business leaders were concerned about the impact on Nottingham's economy.

George Cowcher, chief executive of the Chamber of Commerce for Derbyshire, Nottinghamshire and Leicestershire, said the move was "a big blow."

He added: "It's another traditional local industry – along with coal mining and textiles – which has been virtually lost or in decline in recent years and it will be extremely sad to see it go.

"Although the shutdown will be phased over the next two years, focus must be placed on trying to get as many of the affected employees as possible into alternative employment."

And finding work is high on many of the employee's agendas.

Jamie Butler, 41, a worker at the factory, said: "I've been here 23 years and my wife works here too. We've got four kids. It's going to have a massive effect on our family and our life."

Chris Ward, 44, another factory worker said: "I just feel very demoralised and upset. It is a bad day for Nottingham – there is a lot of history here."

Derek Bergin, 56, from West Bridgford, worked at Imperial Tobacco for 33 years on the production floor but retired last November.

He said: "We are shocked. There has been a lot of streamlining in the past few years but we still never thought that Nottingham would close completely.

"A lot of younger people had started working there and hoped to work there for a long time.

"Those are the ones we are feeling sorry for as usually when you get a job there, you stay there. Those younger people are going to be very disappointed."

But Dr Alexander Trautrims, lecturer in supply chain management at Nottingham University Business School, said the tobacco market was shifting to the East and the company had to follow its customers.

"Smoking is becoming less popular in the developed world but it is increasing in places like the Far East and Middle East," he said. "As a company selling a consumer product, this is where you want to be."

"Smoking is shrinking further and further so there needs to be consolidation in European markets as there won't be a lot of growth.

"Moving manufacturing to Eastern Europe means it is going to be easy enough to put the product on to lorries and send them to the UK. So the decision is logistically sound."

Yet, even if the logistics make sense, it hasn't stopped the local sense of loss, with another Nottingham name biting the dust.

Mr Bergin concluded: "It really is a shame. It was a great company for local people and a big employer over the years, hiring thousands of people.

"But the amount of production just kept declining and there is nothing you can do about that. It is just very sad." Enditem