Nice Money If You Can Get It

How much do you think it costs to create 721 jobs?  I'm not speaking about exceptionally highly skilled jobs but possibly those at the lower end of the market. £1 million?  £2 million?

Figures from Scotland's Regional Selective Assistance fund show that ink giant HP snaffled almost half the cash given out in the last quarter.  Between July and September, Scottish Enterprise via RSA, gave out £14.8m.  HP Enterprise Services UK Ltd got £7m of this to create 721 jobs in Erskine.  In total the £14.8m grants will create 1,447 jobs and keep another 470 posts safe.

Scottish manufacturing firms, 16 of them, collected £2.5m to create or safeguard 368 jobs.

After HP the next biggest payout of £1.7m went to Vertex which promised to create 368 back-office jobs in Glasgow.

I have no objection to taxpayers' money being used to create jobs when those jobs are genuine and provide people with reasonable security and a living wage.  But I thought I would remind you that the ink giant HP sacked 850 people at its plant in Erskine in last year, because production of servers and storage devices were to be moved to the Czech Republic. In 2006 HP shifted 200 manufacturing jobs from its Erskine factory to Pardubice in the Czech Republic.

Jim Sheridan, MP for Paisley and North Renfrewshire said at that time:

the decision was: "one of the worst cases of corporate deceit I have ever come across." 

I doubt if that will have been of concern to Scottish Enterprise though. As long as the boxes are ticked...

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The Diageo Business

As some workers looked on from the public gallery today, John Swinney updated the Scottish Parliament on the campaign to try to save the jobs of 700 Diageo workers. A further 200 workers may lose their jobs at the Glasgow distillery. Drinks giant Diageo announced at the start of July that it wants to shut the bottling plant in Kilmarnock but create 400 jobs at the packaging plant in Leven, where there would be an £86m expansion programme.

Mr Swinney also estimated that the cost to the public sector for every job lost may be as much as £20,000 a year.

"Nine hundred job losses in the west of Scotland, particularly in the current economic climate, represent a body blow, not only to the individuals likely to be affected, but to the wider community and local economies."

He said the fact that Diageo had not approached either the Scottish Government or Scottish Enterprise before it made its announcement is a "matter of real regret."

Alternative proposals were agreed last week by a task force which has brought together trade unions, local authorities, Scottish Enterprise and politicians. If adopted, the proposals may see production continue in the Glasgow distillery, together with a new plant created in Kilmarnock.

Where does this leave Fife? Central Fife MSP Tricia Marwick has warned that she will not accept anything that threatens the long-term future of Diageo's operations in her constituency as the row continues.

Mrs Marwick said "I will not accept any proposals which could affect the long-term future of Diageo's bottling plant in Leven or the distillery at Cameronbridge. My first duty is to the people who elected me to put their interests first and that is what I intend to do."

She added, "In my view a new bottling plant in Kilmarnock threatens the long-term future of Leven."

I'm sure we all understand the dilemma here but how much more interference will Diageo take before they throw up their hands and say, "Enough"?

One solution already muted is that Diageo could turn Kilmarnock into a Johnnie Walker Heritage Centre which could employ many of those whose jobs would go. People come from all over the world to visit whisky distilleries and with Johnnie Walker being a top seller there is no doubt it would quickly attract visitors.

As for Tricia Marwick, I applaud her stance. She ignored calls at the weekend to boycott the Diageo sponsored Johnnie Walker golf tournament at Gleneagles and attended to give her support.

Businesses will be watching this matter carefully. Our politicians can't afford to mishandle it and be more of a hinderance than a help.

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IT Firm Back in Scottish Hands

After a £28m management buyout two information technology service companies transferred out of French ownership and back into Scottish hands in a deal that creates the country's largest independent IT business.

The MBO, which is being backed by Close Growth Capital and Scottish Enterprise, also marks the largest private equity deal in Scotland so far in 2009 and it ranks as one of the biggest transactions in the UK IT sector in recent years.

The buyout is symbolic of the turmoil and seachange strategies throughout the hard-pressed technology sector - where one company sells off businesses to refocus on core activities and thus creates opportunities for consolidation and buyouts in other areas.

The new company has forecast £32m in revenues in its first year.  It has 330 staff in Glasgow, Aberdeen, Edinburgh, London and Houston with expansion plans to increase turnover by a further £50m in three years.  Amor added that it plans to expand its workforce by creating around 50 new posts by the end of 2009.

Source:  The Herald

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SCOTLAND WINS INTERNATIONAL CONTEST

Little recognition has been given to Scotland's success at winning an international contest to host a cutting-edge operation which aims to transform the way companies run major projects around the world and is expected to create about 200 jobs at an iconic site near Glasgow.  The groundbreaking inward investment by French company Altran is to be on the former Black & White whisky site at Steppes, near Glasgow and is to be marked by a landmark high-rise called Buchanan Tower, after the producer which produced the blend.

The Herald's business editor Ian McConnell says there were many locations considered including Germany, Singapore and India for what is going to be called a 'project factory' but is in essence a hi-tech hub.  The Centre will employ innovative software to help manage major projects for companies around the globe.

Steve Boyle, chief executive of the Altran CIS  division highlighted the part Jack Perry and officials at SET had played in securing the project in the face of international competition.  "They have played a very smart game here," said Boyle of SE, "They have just got us on the hook to think about Scotland and they've never really let us off the hook."

Altran will receive nearly £250,000 of regional selective assistance funding from the Scottish government over three years.  Altra CIS's investment amounts to more than £2m.  John Swinney is expected to join Altran executives for the official launch of the operation at Steppes this week.

It is not often I give credit to Scottish Enterprise but it is due here, so well done.  If Altran's plans come to fruition this could be a well deserved boost to the Scottish economy a few years down the line.

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