Sell-outs: Kimberly-Clark took £12m grant - and now axes 500 at Barton-upon-Humber factory
AN INTERNATIONAL firm has been criticised for axing hundreds of jobs despite receiving a multi-million pound Government grant to open its factory on the Humber.
About 500 workers, many of them from Hull and the East Riding, face losing their jobs after American hygiene giant Kimberly-Clark announced proposals to close its factory in Barton.
The factory was set up 20 years ago with a public subsidy of £12m – a grant that would be worth £20m in today's prices.
It's the third major blow to East Yorkshire in days. Seven Seas has announced plans to close its Hull site, and almost half of the workforce based at McCain are in danger of losing their jobs.
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Hull East MP Karl Turner said: "Companies are too quick to take local government money and then desert us when times get tough.
"This is more money out of the local economy and more pain for families."
Kimberly-Clark's announcement brings the total number of potential job losses across the region to almost 800 in less than two weeks.
Mr Turner said: "It is really disappointing that companies do not think as much of the region as they do their profits.
"Families do not deserve to be ditched as soon as the going gets tough."
Terry Geraghty was leader of Humberside County Council when negotiations were under way with Kimberly-Clark to persuade the firm to locate on the Humber.
Cllr Geraghty, now portfolio holder for culture, sport and leisure at Hull City Council, said: "I am surprised and disappointed.
"Humberside County Council put a tremendous amount of work into the investment.
"I had to fight hard to get the company to look at Humberside but they liked what they saw and it was a huge success of that era. "
The firm has now made the decision to drop the Huggies nappy range in Britain and the plant is likely to be closed by March.
One Hull man working at Kimberly-Clark said: "I have given the past 20 years of my life to the company.
"The majority of employees have been there for a long time, too – it has always been their job.
"This has come as a complete shock and I think about 50 per cent of the staff live in Hull or East Yorkshire, so it will really affect the region."
Shocked staff were given the unexpected announcement just hours ahead of a financial update delivered to the New York Stock Exchange, on which Kimberly-Clark is listed.
Employees were expected back at Kimberly-Clark today. There are 378 people directly employed, with a further 120 involved in contracted logistics operations exclusive to the Barton factory.
Plant manager Graham Tongue, who is also affected by the strategic decision, said: "As a plant, we are not a profit centre. As far as the competitive nature of the nappies market has been, we have never been able to get a sustainable business model in Europe.
"It is very shocking, unsettling news for the staff and our focus is about supporting them and their families now and in the coming months as well."
A backdrop of declining sales and an unfavourable currency exchange rate emerged from yesterday's results.
The official line from the company said it was "making strategic changes in Europe to focus its resources and investments on the company's strongest products and markets in order to deliver better returns in the future".
Hull North MP Diana Johnson said: "After hearing dire news from McCain Foods and Seven Seas last week, and so many other public and private sector jobs currently threatened in Hull, this news from Kimberly-Clark is another heavy blow to our region."
Another 60 jobs from Kimberly-Clark are to go in North Wales, with three other plants in continental Europe also affected.
Dave Faddis, vice president of supply chain at Kimberly-Clark Consumer Europe, said: "No decision such as this is ever taken lightly and it is with regret that we have to propose the closure of Barton as part of changes to our European business.
"These are tough choices but they are necessary to improve our competitive position and make Kimberly-Clark's consumer business stronger in Europe."
Mr Faddis said it is a very tough marketplace, squeezed by competition from other brands and supermarkets' own-label nappies.
He said: "The reason this decision has been made is because of our performance in the marketplace not meeting our expectations.
"We have been losing market share and we have not been achieving any profitability."
Cllr Geraghty said he feels sorry for the workforce, who thought they had jobs for life.
He said: "My thoughts go out to them – they put a lot of hard work into it."
The councillor said he is now hoping to hear positive news from Siemens to give the region a much-needed boost.
The German energy giant is on the verge of agreeing a deal to bring 800 jobs to the city through its creation of a wind turbine manufacturing plant at Alexandra Dock.
Thousands of jobs could be created in the supply chain if the Siemens development goes ahead.
Cllr Geraghty said: "Let's just hope we have good news about Siemens.
"We need to get this announcement to give us a boost and lift this gloom."
Video: Dave Faddis, vice-president for supply chain at Kimberly-Clark Consumer Europe, on the Barton proposals