Miracle on the Mersey

Vauxhall hasn't needed to top up catering facilities at its Ellesmere Port site in over a year, according to local folklore. Two loaves and five fish are more than enough for a factory team that serves up miracles as a signature dish. "Things looked as grim as you could imagine," says Vauxhall HR director Phil Millward (pictured, right) of the dark days 18 months ago, when the site's management team prepared to read the last rites over the plant. Down and almost out Ellesmere Port was in an end game. Recession-hit parent General Motors declared bankruptcy and looked to cut its losses in Europe. First stop was a Cheshire plant seen as antiquated and plagued by industrial unrest. "It was rumoured the decision had already been taken [to shut Ellesmere Port]," explains Millward. "They thought we had bad industrial relations, low productivity and high costs. A new leadership team was brought in after GM went through bankruptcy. They were reading from a storybook on Ellesmere Port written by someone who had a vivid imagination for horror stories and thrillers." Like all good thrillers, the plot included one final twist. Ellesmere Port was earmarked for shutdown alongside a sister site in Bochum, Germany. Both factories were rumoured to be doomed, says Millward, but the plant that proved to be the stronger of the two would have a shot at survival. Ignoring the record books on shootouts with Germany, Millward began plotting Ellesmere Port's great escape. The fightback begins, the infighting starts Millward says: "To me there was a need to talk with our key stakeholders – local and national unions, and government. I wanted to do it in a very controlled and considered manner." Millward faced a war on two fronts: overseas, he had to convince US bosses of Ellesmere Port's worth; at home, the challenge was to persuade a heavily unionised workforce to support a radical survival plan. "Morale was as low as you can get, chins were on the floor," recalls the Vauxhall boss. "Ellesmere Port, for whatever reason, has been surrounded by rumours of closure since the 1970s... there comes a time when it sticks." The scenario will strike a chord with other UK manufacturers who've hit crisis point. The shopfloor, schooled in an 'us and them' industrial culture, just didn't believe managers were telling the whole story. "I had some very, very difficult conversations," says Millward. "One between myself and a colleague in the trade union got quite vicious. Because we'd been dogged by rumours of closure for 30 years, they said, 'you're never going to close. All you're doing is using this as another excuse to win more gains and we're not going to do it'." But Millward was a difficult character to pass off as just another corporate crony. A serving board member, maybe, but Ellesmere Port born and bred and a graduate of the shopfloor, he joined as an engineering apprentice in 1969. "No bullshit," says Millward of his negotiating style. "We've always been able to have open, frank and caustic conversations with each other. You have to be able to get it all out on the table or you'll never go anywhere." So Millward told it straight. "It's very difficult for a trade union to consider a dilution or elimination of the benefits it's fought for over many years," he explains. "But what did we want? To lose 2,000 members or retain them in premium manufacturing jobs?" Millward left one final thought for his colleagues. "I said, 'if we lose this, nobody is going to point the finger at me and say I didn't try. If this facility does close, then it will only do so after I kill myself trying to stop it.'" The last stand was reinforced by support from Tony Woodley, former Unite general secretary and also an ex-employee at Ellesmere Port, who helped to lobby support at the plant. The flexible working masterplan Negotiations centred on a landmark flexible working deal. Workers would voluntarily give up working hours during quieter periods, with a promise to make up shifts when production volumes picked up. The proposal would mean a dramatic reduction in overheads at Ellesmere Port through a series of planned shutdowns. But the plant would retain its skilled labour and be at full strength to start making GM's new Astra from 2015. It was a leap of faith for both parties. Employees sacrificing shifts in the short term for the promise of job security. And management agreeing to pay out for those unworked shifts upfront. A compromise started to take shape. Millward and his team felt sufficiently confident to start quoting the potential savings from flexible working in discussions with their US paymasters. The heavyweight monetary figures were quickly complemented with some sizeable political ones. Geneva keeps time with Cheshire Vince Cable, an Astra owner, weighed in to support Ellesmere Port's survival campaign, paying a flying visit to the GM chief executive in New York then meeting visiting GM chiefs in Geneva. From Ellesmere Port's senior team, trade unionists or ministers, Team GB's message was clear: Ellesmere Port was a plant of national importance that would go the extra mile to stay open. Alarm bells sounded across the Atlantic, says Ellesmere Port's plant director Martyn Cray. "I think the Americans saw what the government was prepared to do to support UK manufacturing, plus Unite's 110% flexible agreement, and they thought 'the Brits get it'." From disaster in September 2011, Ellesmere Port teetered on the brink of triumph the following spring. GM chiefs were hinting at a spectacular U-turn over the site's future by awarding a £125m deal to build the new Astra. But for Millward, Cray and his allies, there was still one final hurdle. Cray recalls: "Although, on the one hand, GM were saying they were going to put the new car here, it was reliant on the shopfloor voting for their future. If they'd said no, then they were shutting the gates." Plant-saving deal goes to the vote Cheshire locksmiths breathed a sigh of relief when a whopping 94% voted yes. It was a different story in the manufacturing superstate of Germany. Bochum had been unable to deliver the same innovative working agreements and was consigned to closure. England 1, Germany O, as some papers put it. Happy ever after? Nearly one year on and patriotism has given way to practicality at Ellesmere Port. The plant has had to cope with bitter recession in key export markets in southern Europe. A two-shift pattern is in place with regular down days a reality as the site looks to adjust to the slump. But there is a steely determination to stand together. "Traditionally you might see slash and burn," says Cray. "It's a short-term view. The way JLR is going, if workers left me to go over to Halewood, I'd never get them back." The loyalty has worked both ways. Ellesmere Port was named in Britain's top five employers by HR research body the CRF Institute last month and topped a GM global survey on workforce satisfaction. Excitement mounts over the new Astra. A third shift looms, with vehicle production set to reach over 200,000, and work is also underway to boost the proportion of UK-sourced parts in the new model from 10% to 25%. Facing oblivion may just have been the best thing that ever happened to Ellesmere Port. Like many other near-death survivors, the plant has been freed from focusing on the banal as it strives to make the most of its second chance. "I remember meetings with the trade union which were dominated by complaints that the vending machine drinks were too warm," recalls Cray. "We had a meeting last night where we had the union guys saying 'how can we help you get more cars in this place? We're worried our guys are staying home too long.' That's guys who want to come to work even though they're being paid 100%. That's from a trade union. How things have moved on." The give-and-take flexible working deal that helped save the site Low demand Workers are paid upfront for all contracted hours, but agree to sit out a shift if it's deemed superfluous to the site's production demands. For example, an employee who works five shifts a week might sacrifice their Friday shift if Vauxhall produce all the cars required by Thursday. The plant can then be closed over a three-day period, offering big savings on overheads like heating and lighting. Alternatively, production volumes might be met over a 10-week period with the eleventh week awarded as fully paid holiday. High demand Management is able to call in pre-paid workers to cope with soaring volumes. An employee who banked an eight-hour shift during a quiet period will credit the company by coming in and working that time as an additional shift. Employees will pick up an additional top-up fee as the shift will be performed during the weekend. Shopfloor benefits - Job security - Pay in advance - Premium pay when banked shifts are called in Management benefits - Massive savings on overheads – ability to tailor workforce shift patterns to maximise plant efficiency - Retention of skilled labour Four ways to better union relations 1 Find a common goal Management might want to turn left while the union members think it's quicker to take a right. Cue an almighty squabble over who's got the better sense of direction. Far better to focus instead on the fact that both sides actually want to get to the same place and working collaboratively is going to be the quickest way to do so. And don't get sidetracked on the way. If the big picture is about saving your site, arguments over who should have seen it coming first are a pointless exercise. Stay calm, don't retaliate and bring the focus back to what can still be done. 2 Tell it straight Dishonesty is the manufacturing site's version of an oil slick. The local habitat is clogged up with a thick, polluting grime that can only be removed with a lengthy clean-up operation. Managers must avoid a spill with their life, says Millward. "People quickly smell bullshit. People soon sense when you're playing a game. What you must do is be honest. Just be open, transparent, straightforward and direct." The qualities will engender trust and teamwork, adds the Vauxhall chief. 3 Keep it focused Discussions on the Ellesmere Port flexible working deal were kept deliberately tight knit. Keeping negotiating teams small means meetings can stay focused. Capping numbers also removes the sense of confrontation that might come from lining up like Montagues and Capulets across the room. Be wary of little things like seating plans. Seat union members alongside managers, rather than opposite each other, and you will also bolster the sense of collaborative working. 4 Change your mindset If you walk into negotiations braced for a blistering row, then you can hardly be surprised when the hollering starts. Many management teams fall into the trap of pre-judging union members as troublemakers, explains Millward. Assumptions are unhealthy and incendiary. "A lot of people see the trade union as a problem," says Millward. "More often than not, the trade union can be the solution to the problem." Management teams will reap what they sow, agrees Cray. "The trade union you get is a mirror of the management team. If you have an inflexible management team, why on earth would you get a flexible union?"