The truth behind the Remploy headlines
08 April 2008
Caroline Hayes speaks to Remploy’s general manager Rick Cook to discover more about the job cuts that made the news.
Last year, Remploy hit the headlines. Not for its success in providing employment for people with disabilities, but for closures and redundancies. The unions did their jobs well, concentrating on the emotional story of having hundreds of disabled people joining the dole queue. Rick Cook, general manager of Remploy Electronics, a standalone business in the Remploy Group, puts the record straight in an exclusive interview with Electronic Product Design.
Remploy Electronics is a standalone business unit of Remploy, the government-funded company that was established in 1946 to provide jobs for injured and maimed servicemen returning from the war. However, the company now provides employment for the wider disabled community. “The disabled community still struggles and is disadvantaged in getting mainstream employment,” says Cook. While reactions to people with disabilities may vary in different companies, for Remploy “...that is our business, that is what we are in business for. It’s a fact that a lot of people wouldn’t be employed [at senior management levels]; in Remploy they will progress on their abilities. We concentrate on ability rather than disability,” he states, adding: “Disability is a challenge for the person, but not for Remploy”.
So why the thousands of redundancies announced last May across the whole Remploy group? Why close factories and put employees on the dole in some of the poorest parts of the country where job prospects are bleak? Cook calmly goes over the process that prompted the modernisation plan.
As a government-funded company, it has to account for its finances. The government is keen to keep people off benefits, but doing so must not outstrip the ‘benefits bill’. In May 2006, the National Audit Office asked for an independent review by Price Waterhouse Coopers. The result was a recommendation for a plan to modernise the operation, so that the cost of employment to the taxpayer did not eclipse the benefits bill. “We have to supply a competitive route to employment,” says Cook, speaking of Remploy’s remit. The modernisation plan was all about not having the taxpayer foot the bill for the decline in manufacturing in the UK.
The outrage at the closures was a denial of the way business has to be done in the UK today. “Manufacturing is decreasing,” Cook says, and calls competition from Asia a red herring. Manufacturing is just not growing. “We are not going to offer ever-increasing numbers of people jobs in manufacturing,” he asserts.
Cook is an old-school sales manager. He talked candidly about the business and the “terrible, painful time” finalising the modernisation plan. He was keen to set the record straight about how the emotive issues have eclipsed the hard facts. “We [the government and Remploy management] made a commitment that not a single disabled person would face compulsory redundancy,” he maintains. When 90 per cent of employees at Remploy are disabled, this is at odds with news reports last year. Cook clarifies that some employees had built-up a good company pension, and at 60 years and over, they took the voluntary redundancy option. However, he was at pains to point out: “They will not be made redundant…we made that pledge because we are in the business of employing disabled people; it is not part of our principles. It’s not true, we are not heartless, there was not enough work for the number of people employed [in manufacturing] and that’s why modernisation had to happen.” Cook put the number at four or five of those who are not disabled and were therefore made redundant across the business.
The Medway factory of Remploy Electronics is to close. Barking, Bolton, Southampton and Edinburgh factories still exist. Where there were mergers, (Chandlers Ford and Woolwich), the employees have moved to Southampton and Barking sites respectively.
Remploy Electronics will continue to provide PCB population services, electro-mechanical assembly and final assembly, as well as cable and wire harness assembly; all value-added services that give Remploy a competitive edge. Test, limited design for manufacturing and “wide-ranging capabilities” to differentiate and take the business further. Add to that the nervousness of IP protection when outsourcing to Asia and it becomes clear that Remploy Electronics is not setting out to compete with China’s manufacturing industry. Instead, it is targeting small to medium enterprises and projects in volumes and complexities that would not interest China. Cook explains that the ability to reconfigure every one to three months is not an issue for Remploy Electronics as it can be in Asia. To him, it is all part of the local service and flexibility that a specialised electronics company can provide.
Turnover has increased from £4.9million in 2006/2007 to £6million in this financial year. In keeping with the modern business model, the Remploy Group is looking to another business within the group; Employment Services (ES). This reflects the increase in leisure, retail and other industries, with ES able to provide employment and training/retraining in these areas. Last year, ES recorded 5,000 new placements. This is projected to be 20,000 by 2012. That is, emphasises Cook, new placements and new jobs; more than manufacturing could ever provide in the UK.
After meeting this earnest general manager, I was confident that the modernised Remploy Electronics would continue to plough its own furrow without losing sight of the honourable principles that established the company over 60 years ago.
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