The planned closure of the Ryton car plant in Coventry has sparked an increasingly bitter row between the government and unions over British employment rights.
The unions launched a campaign yesterday to persuade PSA Peugeot Citroën to reverse the closure decision, including the prospect of strike action. Derek Simpson, the general secretary of Amicus, also launched a fresh attack on government denials that Britain's employment laws made it easier to make British workers redundant than French workers.
Britain's employment laws had come under fire on Tuesday from the unions in the wake of PSA's decision to close the Ryton plant with the loss of 2,300 jobs. Their claims were rebutted by the government, which credited Britain's flexible labour market with helping to create jobs.
Yesterday the two sides returned to the fray. Alan Johnson, the trade and industry secretary, denied it was quicker to get rid of jobs in Britain than elsewhere. "We have introduced protection which we did not have before ... it's getting the balance right between protecting workers and creating a situation where it's so difficult to shed jobs that companies don't invest in the first place," he said.
Mr Simpson claimed government ministers were either wrong or had been misled and weak labour laws were putting UK jobs at risk. "Job protection similar to that enjoyed by workers in France would give British employees the opportunity to compete for investment and work on important issues like productivity and efficiency," he said.
The London law firm Clifford Chance said yesterday that the cost of shutting a major factory in France could be almost three times as much as in Britain. Mike Crossan, Clifford's employment law partner, said he would expect the cost to Peugeot of shutting Ryton to be less than £50,000 per worker. Had the firm chosen to shut a French plant instead that figure could have been as high as £140,000.
"The main difference between the two countries is the cost of the social plan. When a major factory closes in France the employer has to fund a series of measures to help the workers find new work. Redundancy packages given to French and British workers in similar circumstances would be broadly similar."
William Dawson, head of the international employment group at another London law firm, Simmons & Simmons, agreed that the extra time for French closure meant the process was more expensive than in Britain. However, he said: "The flip side is that for a company looking at whether to invest in Britain or France, a major factor will be the cost of pulling out if things go wrong."
Jean Martin Folz, PSA chief executive, insisted the decision had nothing to do with British or French employment law but won the cost of running the plant.
In Coventry, union officials held a meeting with workers yesterday morning at which they were understood to have taken a hand count to determine their members' appetite for strike action. The vote was said to have been evenly split.
Backstory
Britain retains a strong car manufacturing industry despite recent closures, according to the Society of Motor Manufacturers and Traders. In 1980 Britain produced 923,000 cars, while the industry, including component makers, employed 442,000 people.
Last year about 1.6m cars were made at a time when the industry employed 175,000 people - though the numbers do not include workers at component plants outside the UK. "Britain has more volume car manufacturers than any other EU country and has more than 100 sports car makers," an SMMT spokesman said.
Experts say the planned closure of Ryton will mean Britain is unlikely to beat the production record of 1.9m set in 1972.
