Burberry - Made in China
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keep burberry british'They've got no reason to take it away from us' The polo shirts made at south Wales factory cost £5 each to produce - and sell for at least 12 times that. So why is Burberry planning to move production to China? Stephen Moss meets some of the 300 workers who will lose their jobs

 Christmas comes early in south Wales. It is only the end of November when I visit, but many of the houses are already displaying their seasonal finery - elaborate light shows, inflatable Santas, a reindeer and sleigh encased in a curious transparent globe.  The Welsh working class, poor and much kicked about since Mrs Thatcher decided to unleash her Friedmanite experiment on them, love Christmas and know how to celebrate it. Eat, drink and be merry, for tomorrow you may not have a job. The fabled Rhondda has been more or less stripped of all its industry - mines, iron and steel works, everything that defined it in the 19th and 20th centuries. Now it is engaged in one final fight - to save its last major textile manufacturer, the Burberry plant in Ynyswen, near Treorchy. Burberry announced in September that it was switching production of its polo shirts to Asia (China seems the likeliest site) or South America, and the 300-plus workers were to be made redundant. Give or take a couple of companies making windows, it will be the end of manufacturing in the Rhondda. I have arrived feeling guilty because the national press only started taking an interest in this three-month-long battle to save the Burberry employees' jobs when a celebrity began making a fuss. The actor Ioan Gruffudd, best known for his role in Hornblower, is one of the faces of Burberry; his dark, chiselled looks feature in its ads. But he is also a Valleys boy and grew up just 10 miles away. At first he resisted getting involved - a contract is a contract, insisted his management when he was lobbied - but recently he came out in support of the threatened workers and said he had written to Burberry's chief executive, Angela Ahrendts, asking her to reconsider the closure plan. I apologise to John Harris, GMB branch secretary at the Burberrry factory, for failing to show any interest until Gruffudd's spot of heart-searching. "Well, that's the way of the world," he says. "I suppose in the grand scheme of things 300 jobs in a remote part of Wales doesn't mean anything to the country, does it? But it's everything to us. We're grateful to Ioan for making a stand." Harris is 40 and has worked at the Burberry factory for 22 years. Like many of the employees, he joined straight from school and has never known anything else. The workforce here is unusually immobile; a remarkably high percentage of workers don't drive; they fear for their future if the factory does close, as planned, in March. Alan Williams is 56 and has worked here for 40 years. He doesn't expect to get another job if he is made redundant. "Who's going to employ me at my age?" he says. He is bitter about Burberry's decision to close the plant, which has been in the Rhondda since 1938 and once employed 2,500 people. "We have worked to get Burberry where they are today, and they're just dumping us on the scrapheap. They're going to China to earn 2% more than they earn now." The GMB estimates Burberry will make an extra £4m by switching production to Asia or South America; operating profits in the six months to September 30 were £84m; full-year profits are on course to be double that. It's not as if the factory workers are earning a fortune. Most are on the minimum wage and take home £169 for a 39-hour week. The majority of the workforce are women, and in the past their income supplemented that of their husbands. "Families existed on the men's wages and lived with the help of the women's wages," is the way Labour councillor and local publican Jeff Williams puts it. But now, with the wholesale job losses in engineering and iron and steel that followed the closure of the mines, many women are the sole breadwinners. What used to pay for luxuries now finances life. "I've got a young family," says Gaynor Richards, a 42-year-old sewing machinist. "I'm not sure where I'd find a job; there's nothing around here. I can't drive, and this is on the doorstep for me. There's no reason to take it away from us, is there? We've got the quality and the skills, and they're making the profit." The Rhondda factory, which used to be called Polikoff's after its founder, Alfred Polikoff, has made many Burberry products in the past 20 years, but recently has been making only one - polo shirts. The GMB claims the factory manufactures them at a unit cost of £5; in its flagship store in London's New Bond Street, Burberry is selling them for 12 times that price. In China, the union calculates, it might be able to reduce the unit cost to £2 or £3. "It's all corporate greed," says 35-year-old mechanic Dean Hazell, who has worked at the factory since he was 16. "They already have a huge mark-up." He and others see Burberry's demerger from its parent Great Universal Stores last year and its full listing on the stock market as the trigger for closure. Publicly quoted companies tend to pursue profit more aggressively, and Burberry has proved less paternalistic than GUS. The company, which celebrated its 150th birthday in 2006 and has enjoyed considerable success over the past five years after a long period in the doldrums, makes no apology for its pursuit of profit. "We went through a review of our supply chain over a period of 12 months," says commercial director Michael Mahony, "and concluded that we could not make the factory commercially viable. Polo shirts can be produced at a substantially reduced cost overseas." He would not be drawn on whether "not viable" means not profitable; the union and workforce are convinced that the factory is making a profit. He stresses that Burberry remains committed to manufacturing in the UK - it has factories in Rotherham and Castleford - but, it seems, only for its more up-market products, such as the so-called "iconic" rainwear. Mahony says consultations with the union are continuing and that no final decision to close the factory has yet been made, but it would be a remarkable volte-face if the company bowed to the growing pressure and reversed its decision. More likely is that part of the factory may remain open to produce samples and prototypes of new garments, but that will depend on money from the Welsh Clothing and Textile Association. It would be a general facility rather than a Burberry factory, and would only account for around 50 jobs. But it would at least mean that Burberry had left some legacy in the Rhondda. None of this provides much solace to a workforce facing a Christmas of uncertainty. "I can't remember what I used to think about before," says Hazell, "because now it's all I can think about - what am I going to do, what am I going to get rid of, am I going to get rid of the car, what can I stop paying so I can save money? I'm thinking about it every five minutes. It's the future I'm worried about - what are my kids going to do when they grow up? I've got two children, 10 and seven, and there's nothing here for them." Warehouseman David Rees is one of the factory's longest-serving employees. Now 62, he joined straight from school and has clocked up 47 years. "I was hoping to complete my 50 years' service and go out with a handshake and someone saying thanks for all the service that I've done," he says. "But they don't think of you in that way; you're just a number to them. It doesn't matter if I've done 40 years' service or two years' service. You're thought of just the same. They ask us to come in at ridiculous times in the morning, do all the overtime they require, and this is what they think of you. They've got no thoughts of loyalty to you." Burberry announced its closure plan on September 6. A month later, to the bafflement of the workforce in the Rhondda, every employee received a letter from Ahrendts hailing the success of the brand and thanking staff for their hard work. "This is just the beginning of our vision, and you have helped us execute it brilliantly," it concluded. "Thank you again for your continued effort, support and commitment along this wonderful new journey. We look forward to continuing to openly communicate our plans, to receiving your ideas and feedback ( This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ) and to celebrating our future successes with you." Apparently, the feedback from the Rhondda employees was something to behold as they prepared for their own particular journey. The man leading the fight to save the factory is GMB senior officer Mervyn Burnett. He says south Wales has lost thousands of textile jobs in the past decade as manufacturing switched to the developing world, but thinks Burberry is uniquely vulnerable to the campaign he is running. "We told the company from the very start, if you close this factory we're out to damage your image and damage the company's reputation," he says. "People come to London from overseas and aim for the Burberry shops; to them it's part of their holiday. They want the 'Made in Britain' label." He doesn't think "Made in Beijing" will have quite the same appeal. Burnett deploys some telling statistics. Ahrendts's annual salary, he says, is £3.6m; the entire redundancy payout for the Rhondda workforce, if the closure goes ahead, will amount to £1.8m. He also estimates that the Burberry directors receive £15m to £18m a year. Burberry is very sensitive to the suggestion that closing the Rhondda factory suggests a withdrawal from the UK; Burnett's "Made in Beijing" jibe has struck a nerve. "We are a British brand and have a strong UK manufacturing facility," insists Mahony. "We account for 600 other manufacturing jobs in the UK, and the Rotherham factory would have closed if we hadn't acquired it in 2004. Most other British brands stopped manufacturing in the UK years ago. We are here to stay." He suggests the local employment situation is not as dire as it is painted, but the people of Ynyswen see it differently. "Three hundred people losing their jobs doesn't mean anything to outsiders, but it means so much to us," says Raymond Bethell, whom I overhear sounding off about Thatcherism in a pub. "Three hundred jobs in the Rhondda Valley is a lot of families - an awful lot of families." Bethell had been giving his politically charged, potted history of the Rhondda to a man who has just retired to the valley. He had sold his house in south-west England, bought one of the miners' cottages ("We call them homes," Bethell chides me when I use that term) and pocketed the hefty difference. The incomer symbolises a trend - the way the Rhondda is changing into an area for retirement and second homes. Property developers are now buying up homes. They know what is coming: these are among the cheapest properties in Britain - a three-bedroomed house for £60,000. But even that is double the price of a couple of years ago, and as people retire here or Cardiff-based workers opt to commute, the character of the area will change. Only one working pit remains, and geology dictates that it won't survive much longer. Some of the others have become museums - relics of the Rhondda's fast-receding industrial past. The tragedy of the workers at Burberry, and of the generation that can recall the industrial boom years of the 1960s and 70s, is that they are caught between two worlds. Their tight-knit community developed around the mines and the factories those collieries fed; but now there is little or no work; certainly little well-paid work. A new Asda supermarket planned for Tonypandy, seven miles from Treorchy, is the main hope for many of those who will lose their jobs at Burberry. There is still a strong sense of community in the Rhondda, but it is atavistic - the cement that held them together, the shared identity founded in heavy industry, no longer exists. In a generation's time, the Valleys will be like the Peak District is now - full of retirees, second homes, tourists and micro-industries, with gastro-pubs in place of the rowdy drinkers' dens that currently exist. That is not to lament the change - I find the sight of unemployed men sitting in pubs drinking pints of lager from 11am to 11pm dismal - but you can't help feeling sympathy for those in the line of fire. "If it closes we'll be grieving because we're losing our friends," says Hazell. "We put the Christmas decorations up early in the factory to try to get the mood up. We're trying to go on normally, but it's not normal at all".

Stephen Moss Tuesday December 12, 2006 Guardian