Page last updated at 13:46 GMT, Wednesday, 1 July 2009 14:46 UK

Diageo to cut 900 Scottish jobs

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Johnnie Walker whisky has been bottled in Kilmarnock since 1820

Drinks giant Diageo has announced it is to cut up to 900 jobs in Scotland.

The posts will go under a restructuring that will see the closure of its Port Dundas distillery in Glasgow and a packaging plant in Kilmarnock.

The firm said the closures would take place over the next two years and will make the business "more sustainable".

Diageo said the job losses would be offset by the creation of about 400 new posts through the expansion of a packaging plant at Leven in Fife.

The firm said about 700 jobs would go over the next two years with the closure of the Kilmarnock packaging plant in East Ayrshire.

DIAGEO JOBS
700 lost at Kilmarnock packaging plant
140 lost at Port Dundas Distillery and Dundashill cooperage
30 lost at Shieldhall packaging plant
400 jobs created at Leven packaging plant
80 office jobs at Dundas House transferred
40 staff transferred from Carsebridge to Cambus sites
64 warehouse jobs at Hurlford transferred out
36 remaining Hurlford jobs relocated
16 jobs in Speyside transferred out

Diageo said the plant faced "infrastructure limitations" which were not issues at its other packaging plants at Shieldhall in Glasgow and Leven in Fife.

The closure of Port Dundas Distillery in Glasgow and the neighbouring Dundashill cooperage will result in the loss of up to 140 jobs.

Diageo said work from Port Dundas could be met through the continued expansion of the Cameronbridge Distillery in Fife.

A further 30 jobs will also be cut at the Shieldhall packaging plant in Glasgow.

Although it is taking on work from the closure-threatened Kilmarnock packaging plant, Diageo said a £3m investment in the site and changes in working practices would allow for a reduced workforce.

The firm stressed that the net job losses would be about 500 posts in Scotland as the headline figure would be offset by jobs created elsewhere.

Job transfers

An £86m investment will see the construction of a new packaging hall to open in mid-2011.

Diageo said it hoped some of these jobs would be taken by employees transferring from Kilmarnock.

The restructuring plans will see about 80 office-based staff at Dundas House in Glasgow transfer to another location in central Scotland over the next two years.

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
Bryan Donaghey
Diageo Scotland managing director

Elsewhere, the company is planning a new £9m cooperage to be built at its existing Cambus site near Alloa by summer 2011.

This will result in the closure of Diageo's nearby Carsebridge cooperage.

The company envisages relocating 40 staff from Carsebridge to Cambus, together with some roles relocating from Dundashill Cooperage.

Diageo also plans to contract out operations currently undertaken at the Hurlford consolidation warehouse in Ayrshire and exit the site next year.

About 64 despatch warehouse jobs at Hurlford will be transferred under TUPE regulations to third party logistics company, Malcolm Group.

The 36 remaining Diageo jobs at Hurlford would be relocated to other sites.

The firm also said haulage of distillery "co-products" would be contracted out to a third party transport company, McPherson Ltd.

Port Dundas distillery
About 170 jobs will go with the closure of the Port Dundas distillery

The 16 associated jobs in Speyside will be transferred under TUPE regulations.

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.

"We believe the plans announced today will help secure the sustainability of our business in Scotland.

"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."

Government talks

Scottish Finance Secretary John Swinney described the announcement as "extremely disappointing".

"The Scottish Government is asking the company to reconsider this course of action and to look at alternatives which protect employment," he said.

"The First Minister has this morning spoken to the company and will meet senior executives tomorrow to make exactly that point.

"This will be a particularly worrying time for workers at Kilmarnock and Port Dundas."

Mr Swinney also said he wanted Diageo to guarantee its pledge not to make any compulsory redundancies for 12 months.

Grahame Smith, STUC general secretary said the announcement was "a massive blow" to the Diageo workforce and could have a "potentially devastating" effect on the Kilmarnock economy.

He said: "Diageo must urgently provide union officials with the full business plan used to justify these swingeing redundancies at hitherto profitable workplaces."

Last month Diageo, whose brands include Guinness, Smirnoff Vodka and Johnnie Walker whisky, said that markets around the world had weakened.

It reported that sales were down 7% in the three months to the end of March.



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