INTERVIEW: Vauxhall HR director on unions, pay and that Vivaro contract

By Simon Warburton | 17 May 2011

Vauxhall HR director Phil Millward

Vauxhall HR director Phil Millward

Vauxhall achieved perhaps the rare distinction in industrial relations of being singled out for praise by its Unite union earlier this year - human resources director Phil Millward talked to Simon Warburton about the state of play between the UK automaker and its labour body. 

j-a: To what extent are unions important to Vauxhall and how would you categorise your relationship with them?

PM: The trade union is a very important stakeholder in the business - it has a responsible role to play. Obviously it has its own hierarchical structure so you need to share much more confidential information with the more senior people. We have a platform of trust and respect that has been established over a number of years.

The trade union can be as much a solution to problems as the company - they are part of the systems and processes and they have equal ownership of them.

j-a You have asked Unite to take some pretty tough medicine during the last few years - how have you achieved that?

PM: We led with the two-year pay freeze, reduction in working hours and a 10% pay reduction for six months. We would never, ever, have reached the level of understanding we did, if the relationship we had for each other was not at the optimum level. It was pro-active communication. We understood the gravity of the situation facing the country and automotive sector. Faced with a solution where disposable income is to be reduced is difficult to swallow.

j-a: Following those difficult decisions, how do you think the UK automotive industry is recovering against the general economic backdrop?

PW: We are still in troubled times, but if you think about Germany in particular, which last week announced GDP increase of 1.5% versus our 0.5%, they have a lot of confidence. [However] Vehicles produced in Ellesmere Port are part of the ones they want, hence around 80% of product at Ellesmere is exported.

There has been a need for the company and trade unions to behave and operate in a different way. The wage freeze in 2009/2010 was very difficult because at the same time, living costs were increasing. [The] Retail Price Index has been rising at around 5.3%... [but] our current pay freeze ends at the end of August this year. I will be negotiating with the trade union next month with respect to a new pay award.

j-a: How does Vauxhall view trade unions within the business?

PM: People should stop fearing the trade union and start to see it as a body that can add value to the organisation. It is [as] important for the union to keep people in work as it is for us.

j-a: Were stable relations at Vauxhall's UK plants key to winning the recent Vivaro order for Luton?

PM: Obviously the negotiations were difficult because we are in a joint-venture arrangement with Renault and Nissan. It is more complicated because there are more cooks in the kitchen who can mess up the recipe, make the meal unpalatable. We agreed to focus on day-to-business to build high-quality vans.

Unlike maybe other organisations where people would have been rattling the bars of the cage to draw attention...we agreed we would not do our negotiations in the media. The trade union had every confidence in the strategy we were following and confidence in management. The workforce was very willing to do just what we pay them to do.

j-a: Were you surprised GM Europe president Nick Reilly received praise from union quarters when you secured the Vivaro business? Unite union general secretary Len McCluskey said Reilly's efforts were "pivotal in securing an agreement with Renault and we are extremely grateful for the part he played."

PM: The union was able to see Nick Reilly - as president of [GM] Europe - was working very diligently finding a solution. He was determined to deliver the result achieved for the Vivaro, which will run through to potentially 2025.

Millward was promoted to plant quality manager in 1997, a post he continued to hold until 2000 when responsibility for personnel was added.

He was appointed to the executive operating committee in 2003 as the company's employee relations director, which added lead responsibility for national trade union dialogue to his existing personnel brief. In November 2008 he was appointed to the board of GM UK as human resources director.