900 Diageo jobs to go in Scotland

Diageo is set to swing the axe in Scotland, with the drinks giant announcing restructuring plans that will see 900 jobs go from sites in Glasgow and Kilmarnock. 

The plans, which are backed by a £100m investment in securing the long-term prospects of Diageo’s Scottish operations, will be implemented over the course of the next two years.

The resulting plans will mean an overall reduction of up to 500 jobs in Scotland. The closure of sites in Kilmarnock and at Port Dundas in Glasgow will lead to the loss of up to 900 jobs, while around 400 new jobs will be created through the expansion of a packaging plant in Fife.

The company has said there will be no compulsory redundancies at the affected sites for 12 months.

Bryan Donaghey, Managing Director of Diageo Scotland, said: “These decisions have been extremely difficult to take. We have only reached them after an exhaustive review of all the possible alternatives.

“I am sorry for the impact this announcement will have on our employees and their families in Kilmarnock and Glasgow and the difficulty this will cause in Kilmarnock where we are a major employer.
 
The final review proposes a number of measures designed to protect the company’s operations north of the border, including the consolidation of packaging operations from three sites to two.

This would result in the closure of the Kilmarnock Packaging Plant in Ayrshire over a two-year period with the loss of approximately 700 jobs by the end of 2011.

The company also announced an £86m investment to expand the Leven Packaging Plant in Fife, which would include the construction of a new packaging hall to open in mid-2011 and the creation of approximately 400 new jobs. The company hopes that a number of these jobs would be taken by employees transferring from Kilmarnock.

 
Under the proposals, the Shieldhall Packaging Plant in Glasgow would receive a further £3m investment on top of the £15m invested in the plant over recent years.

This investment, along with some changes in working practices, would result in the loss of 30 jobs at the site.
 
The closure of Port Dundas Distillery in Glasgow and the adjacent Dundashill Cooperage would result in a loss of up to 140 jobs although it is hoped that some employees would relocate to a new cooperage in Central Scotland.

80 office-based employees would relocate from Dundas House in Glasgow to another location in Central Scotland over the next two years.
 
A new £9m cooperage would be built at Diageo’s existing site at Cambus near Alloa by summer 2011. Diageo’s nearby Carsebridge Cooperage would be closed.

The relocation of around 40 roles from Carsebridge Cooperage to Cambus, together with some roles relocating from Dundashill Cooperage, would bring the total number of jobs at the new Cambus Cooperage to about 70.
 
Operations currently undertaken at the Hurlford consolidation warehouse in Ayrshire will be contracted to third party logistics company, Malcolm Group.

The 64 despatch warehouse jobs at Hurlford will be transferred under TUPE regulations and Diageo will exit the site in early 2010. The 36 remaining Diageo jobs at Hurlford would be relocated to other sites.

Diageo will now engage in formal consultation with employees.
 
Donaghey added: “We believe the plans announced today will help secure the sustainability of our business in Scotland. As Scotland’s largest manufacturing exporter, 85% of our output from Scotland is exported to over 180 markets worldwide.

“We therefore need to be competitive in a global context and the restructuring announced today is a key part of this.
 
“Our plans and the associated £100m investment reflect the strength of Diageo’s continued commitment to Scotland. With these changes, Diageo would still employ nearly 4,000 people across the country.
 
“We will do everything we can to support our employees through this difficult time. We will also work closely with local political and community leaders in Kilmarnock so that together we can seek to address the impact this announcement will have on the town.”

Alan Lodge, 01.06.2009