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Diageo cuts 900 jobs in Scotland Diageo cuts 900 jobs in Scotland
(about 1 hour later)
Drinks giant Diageo has announced it is to cut about 900 jobs in Scotland. 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 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 company, which has its headquarters in Edinburgh, said the closures would take place over the next two years.The company, which has its headquarters in Edinburgh, said the closures would take place over the next two years.
Diageo said the job losses would be offset by the creation of about 400 new jobs through the expansion of a packaging plant in Fife. Diageo said the job losses would be offset by the creation of about 400 new jobs through the expansion of a packaging plant at Leven in Fife.
The firm said a £100m investment programme would also see a new coopering centre created in Clackmannanshire. 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 said the plant faced "infrastructure limitations" which were not issues at its other packaging plants at Shieldhall in Glasgow and Leven in Fife.
DIAGEO JOBS 700 lost at Kilmarnock packaging plant140 lost at Port Dundas Distillery and Dundashill cooperage30 lost at Shieldhall packaging plant400 jobs created at Leven packaging plant80 office jobs at Dundas House transferred40 staff transferred from Carsebridge to Cambus sites64 warehouse jobs at Hurlford transferred out36 remaining Hurlford jobs relocated16 jobs in Speyside transferred out
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.
It aims to create up to 400 new jobs at the Leven packaging plant in Fife.
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 DonagheyDiageo 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.
The company now needs to work with their staff in Kilmarnock and revise these proposals as they did 10 years ago to maintain this presence in and these jobs. Des BrownMP for Kilmarnock and Loudoun
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.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.
'Difficult time'
"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."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 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 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.""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."
Labelling tradition
Kilmarnock and Loudoun Labour MP Des Browne said the closure of the packaging plant would have a "devastating" impact on the local economy.
"Every bottle of Johnnie Walker has a label which says that this whisky has been bottled in Kilmarnock since 1820," he said.
"The town of Kilmarnock and the people of Ayrshire have contributed to this business's profits for nearly two centuries.
"The company now needs to work with their staff in Kilmarnock and revise these proposals as they did 10 years ago to maintain this presence and these jobs. That's what I'll be working for from today."
Mr Browne added that he had called for a meeting with Diageo management.
A spokesman for the Scotch Whisky Association said: "We've no doubt these will have been difficult decisions to take.
"The Scotch whisky industry is working hard to invest to secure its sustainability and competitiveness, which is so important to the Scottish economy.
"We continue to believe whisky has a strong long-term future, as shown by Diageo's own commitment to investing in new and expanded facilities in Scotland."
Last month Diageo, whose brands include Guinness, Smirnoff Vodka and Johnnie Walker whisky, said that markets around the world had weakened.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.It reported that sales were down 7% in the three months to the end of March.