On Sunday 26 July, up to 20,000 according to press reports, marched against the threatened closure of the Diageo bottling plant in Kilmarnock.
It was a massive display of opposition to the company’s plans.
Diageo is the world’s biggest drinks company, with a worldwide workforce of 22,000. Its brands include Johnnie Walker, Guinness, Smirnoff and Captain Morgan. Its profits over the last decade have averaged £2 billion a year. In the twelve months to July of this year, its pre-tax profits amounted to £2.093 billion.
Diageo’s Chief Executive, Paul Walsh, was paid a total package of over £3.6 million last year. He also owns 720,000 shares in Diageo, and has a pension fund with the company amounting to over £8 million.
Yet the company pays just £43 million a year in corporation tax in Britain, where around 30% of its production is based. Diageo dodges around £100 million of corporation tax each year by having transferred ownership of its brands to a Dutch “subsidiary”, effectively a shell company, where it can pay a lower rate of tax.
Despite it all, Diageo announced in early July that it would be shutting down its bottling plant in Kilmarnock, at a cost of 700 jobs, and its distillery and cooperage in Glasgow, at a cost of another 140 jobs. 30 jobs are also to be axed at the company’s bottling plant in Glasgow.
Diageo say the closures and job losses would make the company “more sustainable” and would be partially offset by the creation of 400 jobs in a new packaging plant in Fife — too far away to be a realistic alternative for any of the workers threatened by loss of employment.
If the closure goes ahead, Kilmarnock’s local unemployment rate, would increase to around 7%, nearly double the Scottish average.
The campaign against the plant’s closure — “Keep Johnnie Walker in Kilmarnock” — is very much a cross-party community campaign, as was the demonstration organised by East Ayrshire Council and backed by the local newspaper.
There were just eight trade union banners on the demonstration — UCATT, NUM, EIS, GMB, PCS, Unite, Glacier Metal Shop Stewards Committee, and two UNISON banners — but many demonstrators were carrying Unite-GMB placards.
The tone of the closing rally was set by its compere, the comedian Hardeep Singh Kohli, when he said, “this is not a war between workers and business, it’s about everyone together,” and introduced what he called “the Rainbow Coalition of Ayrshire politics.”
Other speakers represented all the main political parties – SNP, Labour, Lib Dems and Tories. The existence of this cross-party alliance was praised by all speakers, including the Unite Assistant General Secretary Len McCluskey, because, he said, the campaign was “not about making political points but about defending jobs and communities.”
Unite, said McCluskey, was working with the Scottish Executive and Scottish Enterprise to create an alternative business plan for Diageo. But, said, Unite Scottish Regional Secretary John Quigley, that plan should focus on saving jobs rather than on Diageo’s balances.
According to press reports, however, Diageo’s profit margin is exactly the focus of the alternative business plan. The purpose of the plan, probably backed up by some kind of subsidy from the SNP Scottish government, is to demonstrate to Diageo that they can stay in Kilmarnock and still make an indecently large profit.
Is such a broad campaign the most effective vehicle for pressurising Diageo into changing its mind?
There are two objections to that approach.
One is that the campaign, by creating an alternative business plan, is based on showing Diageo, how they can still rake in money if they stay in Kilmarnock. In other words, it makes the right to work of Diageo’s employees dependent on Diageo’s profit margins.
Also such a campaign cuts across the idea of building links between different workers threatened with job losses, and of building an alliance between those workers and the unions to which they belong.
A socialist response to a threat to jobs is not alliance with the SNP and the Tories, but solidarity by fellow workers. Working-class action — in the form of strikes and occupations — counts for more than the weight of public opinion.
There are no guarantees that the alternative business plan will not accept some job losses as part of its “rescue package” for Diageo, and that the pressure to accept the plan will then be on the workers rather than on Diageo.
Socialist and trade union activists need to combine raising ideas about a working-class response to the threatened job losses in Diageo — in Glasgow as much as in Kilmarnock — while also avoiding coming across as finger-wagging lecturers standing on the sidelines of a major and important campaign.