Three years on from the collapse of MG Rover in April 2005, 90% of workers who lost their jobs have found new employment, but most have taken significant pay cuts, researchers found.
A study of a sample of the 6,300 workers ex-Rover workers who lost their jobs when the Longbridge plant here in the UK closed, found that two thirds have suffered wage falls – of an average of GBP5,640 per year in real terms.
But A third of the former workers reported an increase in their salaries. Those out of work the longest suffered the largest drops in income.
About 31% of the workers stayed in the manufacturing sector and are earning broadly similar amounts, but the 60% who moved into the service sector are mostly earning less.
People who found work in four sectors – wholesale and retail, real estate and business services, education, and health and social work – took average cuts of more than GBP6,000 in annual income.
Almost a quarter of respondents said they were in debt or in need of drawing on savings; 36% said they were just about able to manage on their current incomes; and a further 38% said they were in a position to save some money.
As the threat of a serious recession mounts here in the UK, the report carries political and practical lessons for how to handle large-scale plant closures and avoid regional crises of unemployment.
It argues that fast action by local agencies as part of a co-ordinated response by policymakers to support, inform and retrain the workers who lost their jobs can be called a ‘success story’ in that large-scale, long-term unemployment in the south Birmingham and wider West Midlands area was avoided.
About 90% of the ex-Rover workers were in some form of employment by April 2008. Almost three quarters were employed full-time, 11% were self-employed and 5% were part-time; another 5% were unemployed and looking for work and 2% were unemployed and not looking for work.
About 28% of the ex-workers said their current job was better than the one they had at MG Rover, 21% that it was about the same and 46% that it was worse (the remainder were unsure). Nevertheless, a majority still said they liked the work they did and expected to be doing it for the foreseeable future.
The report followed the third wave of research into the fortunes of the ex-Rover workers and comes after previous surveys in July 2005 and December 2005. It was written jointly by researchers at Birmingham Business School and The Work Foundation and drew on a representative survey of 204 workers.
David Bailey, director of Birmingham Business School, and an author of the report, said: “The collapse of Rover is rightly termed historic because it marked the closure of the last volume car maker in the UK. The finding that many workers are in what they see as worse jobs may confirm people in the view that the ‘newer’ jobs in services are just not quite as good as the ‘older’ jobs in manufacturing they have come to replace – though there are significant numbers now doing rather better than they were.”
Michelle Mahdon, senior researcher at The Work Foundation, said: “The jobs at Rover were high quality manufacturing jobs paying above the average for the West Midlands region so it was always likely that workers would not be able to find directly comparable work – over half the respondents are now doing completely different work and using completely different skills.
“In general, people’s health and wellbeing was positive three years on and people claimed reasonable job satisfaction and reasonable life satisfaction, although the research was done prior to the recent downturn in the economy.
“But judged against national levels, it does appear that the ex-Rover workers are now in jobs with slightly lower levels of autonomy, challenge and skill use, and fewer opportunities for progression than other workers in the UK.”
About 60% of workers have undergone training and education. Two thirds took up the offer of free training places offered by local agencies and many others underwent training by their new employers. The types of assistance and support that people found most helpful were free travel to a training course or job interview; a free place on a training course; being sent on a training course by a new employer; and help with setting up a business. However, most people who found a new job did so through their own initiative or through personal contacts.
The UNITE union joint general secretary Tony Woodley said: “This union was proud to lead the fight to save Rover, and this report shows we were right to do everything we possibly could to these manufacturing jobs.
“It is testimony to the resilience of the Rover workforce that the vast majority of those who found themselves out of work when Longbridge closed dusted themselves down and found new work.
“But the bald reality is that most of them were forced to abandon manufacturing, set aside their skills and take a hefty pay cut just to stay in work.
“The real lesson from the Rover experience, and one that we urge government to pay close attention to at this time of tremendous economic uncertainty, is that we must never again allow highly skilled, well paid manufacturing jobs such as these to be lost from our communities.
“As recession grips the UK we need our leaders to take swift and significant steps to protect our remaining manufacturing jobs. Our government must do all in its power to ensure the mistakes of Rover are not repeated.
“We urge it to make every possible use of its stake in the banks and its power to leverage in financial to support our manufacturing sector through these tough times – otherwise we will have no industrial base from which to revive our economy.”