3. Will the Minister make a statement following the announcement of the closure of Hi-Lex and the loss of 120 jobs in Baglan Energy Park? 355

Llywydd, this is clearly devastating news, and my thoughts are with the employees of Hi-Lex and, of course, with their families at this very difficult time. Our focus is now on supporting the workforce and finding alternative local employment, and, of course, this is, sadly, the latest in a series of announcements across the United Kingdom concerning job losses in the auto sector and comes on the very same day that survey data revealed that more than 80 per cent of firms in the sector are concerned for their future prospects, because of the threat of a 'no deal' Brexit. 

Can I thank the Minister for that answer? The Hi-Lex Cable System Company Limited actually was one of the first businesses to move onto the Baglan Energy Park back in the 1990s. It's been there for over 20-odd years, and it's been in profit. You quite rightly pointed out that one of the problems it's now facing is the loss of customers because of the uncertainty in the automotive sector, particularly Honda closing in Swindon, which is one of its major customers. This is not a situation where a business is actually closing down; the business is transferring to another part of the European Union. It's going to Hungary, and this site will actually close within probably about 12 months—they've guaranteed, at this point of time 12 months, no redundancies. But who knows, if Honda goes earlier, what will happen as a consequence of that?

Now, the situation for workers is—. And there are no trade unions within the business, so there is no organisation basically there to help support workers in any redundancy discussions, so will the Welsh Government step in and talk with Hi-Lex to allow it to work with the employees to ensure that individuals, who may be facing redundancy in the coming months, are able to actually get the best deal situation possible and they're not left without any representation whatsoever? Will you also talk to Hi-Lex to see how you can help and work with them to ensure that the 12 months they've given at the moment is going to be 12 months, and we don't actually see a shortening of that? Will you also work with the local authority? Because, clearly, if we're trying to find new employment, we need to attract new investment, we need to encourage growth within local businesses. Because these are well-paid, high-skilled jobs that are leaving this area, and 125 families that are now facing a difficult future because of the unknown of what will happen beyond their employment at that company. 

It is important the Welsh Government now steps up to the mark, and also the UK Government needs to step up to the mark, because, clearly, the whole manufacturing sector across the UK is struggling, because of Brexit, because of other circumstances, because of global economies. And I don't see the UK Government stepping up to the plate. Welsh Government has to step up to the plate now. And will you give me the guarantees, and will you give the workers those guarantees, that Welsh Government will act and will help them and will support them as best possible? 

Well, can I thank Dai Rees for his questions? And I'm sure that Dai Rees will share my concerns about the future welfare of those workers as they face a very anxious time between now and 2020 or possibly 2021, when the site is due to close. We will, of course, press the company to ensure that there is at least 12 months of work for those people who are affected by today's announcement. Those 12 months will give us sufficient time to ensure that the ReAct programme is enabled and that we have full access to all workers on site. The ReAct programme has a very strong record of supporting individuals, and I'm pleased that we do have good relations with Hi-Lex. So, I am confident that the company will enable access to be established for those ReAct teams. 

I'm also confident that we'll be able to work very closely with the local authority in identifying other employment opportunities. We in Welsh Government have set up regional response teams ahead of Britain leaving the European Union, should Britain leave the EU, and those regional response teams will include individuals from within local authorities across Wales. Dai Rees identified the primary cause of the loss of this company, and it is, of course, Honda’s announcement that it would be closing the Swindon facility. After Honda made that announcement, I asked Welsh Government officials to convene a round-table discussion with businesses in Wales in the Honda supply chain. That summit was very well attended by pretty much all of the 20 supply-chain businesses that we have in Wales. I can tell Members that the vast majority of businesses within the Honda supply chain here in Wales rely for only a small proportion of their work on Honda. However, there are a very small number that rely to a significant extent on Honda. We’ve been working with them very closely, including Hi-Lex.

Since we had that round-table discussion, I can also tell Members that we’ve been assisted by officials within the Department for Business, Enterprise and Industrial Strategy in the UK Government, and by the Welsh Automotive Forum. But Dai Rees makes the very important point that the UK Government must step up to the mark on this. I’m due to meet with the Secretary of State for BEIS tomorrow, in London, where I will be making the strongest possible case for the UK Government to allocate funding to the Kingfisher programme, which is looking at businesses that are at risk as a consequence of Brexit uncertainties.

We have stepped up to the plate in rolling out Brexit business resilience funding to a significant number of businesses across Wales. We stepped up to the plate in establishing the Ford taskforce, and in attracting INEOS Automotive to Wales. It’s time for the UK Government to do so likewise.

Minister, thank you for your answer to David Rees. During questions to the Minister for international relations earlier, I wasn’t sure if you were in to hear the question or not, but I highlighted the evidence that the Minister gave to the external affairs committee the other week suggesting that the Welsh Government would be placing more emphasis on exports rather than attracting inward investment. So, perhaps I could ask you to outline whether you feel that approach does need to be reviewed, given the announcement of companies such as Ford and Hi-Lex, as we’ve heard today. And, in the immediate future, can I ask you how you are going to look to support Hi-Lex? And, as David Rees has mentioned in his question, the workers are highly skilled and, of course, will be anxious ahead of 2021. You’ve mentioned the ReAct programme, but I wonder if you can outline how specific programmes can be specifically adapted to this particular situation?

Can I thank Russell George for his questions? Now, in terms of exports, exports form one of our calls to action in the economic action plan—one of the five criteria that businesses can utilise to draw down funding from the consolidated grant funding programmes that Welsh Government operates. All evidence points to the fact that, if you wish to drive up productivity rates within an economy, you have to have a higher proportion of businesses that are operating within those tradeable services sectors and which are globally exposed. That means you have to have a high proportion of businesses that are exporting. It’s absolutely vital. That’s the reason why we included exports as one of the channels to fund businesses in the economic action plan, and why the international relations Minister is so keen to promote exports within her international strategy and to identify those champions for exports right across Wales and to utilise their experiences and their skills to encourage other businesses to export more.

In terms of foreign direct investment, I have to say that opportunities to draw in investment right now from overseas are few and far between, given the uncertainty attached to Brexit. They haven’t dried up altogether. One example of a recent success story was, of course, INEOS Automotive. We competed with destinations across Europe and indeed the globe to win that particular investment, but it is incredibly difficult right now to attract investment to the UK. Nonetheless, our efforts will be guaranteed for the future, and we’ll do all we can to attract high-quality, well-paid, sustainable jobs to Wales—those jobs that form the industries of tomorrow. 

In terms of the ReAct programme, the first thing that we'll be doing is ensuring that we have an accurate picture of the skill sets of individuals within the company. From there, we'll then seek to engage each individual with Careers Wales, with the Department for Work and Pensions, and any other support service that they require, and that could include support services that concern their mental health and well-being. We will then assess what opportunities there are within the sector and more broadly in associated sectors that could utilise their skills. I'm confident that, because those people who are employed at Hi-Lex are so highly skilled, they do have a very great prospect of future employment, but my concern is with ensuring that they don't undergo a period of unemployment between now and when they secure alternative employment after 2020 or 2021.

Can I thank the Minister for his answers thus far and just explore a couple of issues perhaps in a little bit more depth? Obviously, the Hi-Lex cable system plant in Baglan is on Baglan energy park, and you might find a couple of Assembly Members' regional offices on Baglan energy park as well; Bethan Sayed and I share an office not far from this company.

So, yes, it's a car parts plant, it supplies Ford and Honda, it makes cables, windows and door parts for cars, and today's announcement, as you've said, says that it will close in Baglan when the Honda plant closes in Swindon in two years' time. The plant, obviously, in Baglan closes, but the production won't cease; the production will be transferred to Hungary, which remains in the EU at that point. Now, obviously, this is, as you've alluded, an extremely disappointing decision from Hi-Lex today, and is yet another blow, as Dai Rees has said, to the economy of the region, so soon after the news that Ford in Bridgend will be closing too, and they also supply Ford. 

Now, once upon a time, south Wales was the catalyst for the industrial revolution and was the world's manufacturer at one point. And now we are seeing yet another multinational corporation let down their loyal Welsh workforce and move production elsewhere, this time to Hungary. It's devastating news for the 125 workers and their families in Baglan and further afield. Time and again, we have seen jobs being lost in South Wales West, and indeed elsewhere in Wales, because the Welsh Government is failing to drive innovation in industries that simply have no choice but to innovate if they want to survive. 

We know all about the changes in car production that need to happen, but other Governments have managed innovative change, like in Ottawa in Canada, where the Ontario and Canadian Governments co-invested in a new Ford research and development centre there, working on autonomous vehicles. There is change in car production—new cars, different cars in the future. It doesn't mean that the industries here have to be ossified in what they've always done. That Canadian centre opened earlier this year with more than 300 jobs. 

Back to Baglan, according to the announcement, no jobs will go for the next 12 months—the plant is allegedly going to stay open until 2021—so, on the face of it, there is time to plan. I hear what you're saying about ReAct, but usually in these sort of circumstances we have an announcement that so many hundreds of jobs are going at whatever plant there is, and that is it—three months, everything shuts. That's not the situation in this particular case, so can I just explore with the Minister in perhaps greater detail, so the plans—? We do have time here to plan for the future of workers here in Baglan, because the jobs are going to carry on for 12 months, according to management. So, how are we planning a smoother transition so that we keep those jobs here in south Wales, and perhaps expanding on the idea of not just more retraining and everything and a refocus for workers, but obviously trying to develop a vision of what an automotive plant is going to be in Wales: are we still going to be doing car parts, and, if so, for what sort of cars? Are we going to innovate or are we just going to stand by and watch successive car plants like this close day by day? I'm just trying to secure a long-term vision here from the Minister. Diolch yn fawr.

Can I thank Dai Lloyd for his questions and, first of all, say that I disagree with your assessment about the support that the Welsh Government is giving to manufacturing in Wales and the importance of innovation? We're just about to open the doors on the advanced manufacturing research centre in north Wales. That will be a unique research centre. Indeed, your own Members have called for an AMRC in Wales. I hope that you'll be supporting its launch in November. 

We have Europe's finest, if not the world's finest, compound semiconductor cluster; we have M-SParc, again in north-west Wales; we have Aston Martin Lagonda, who have decided to make south Wales the home of their electrification programme. There is innovation across the length and breadth of Wales as a consequence of the strategic investment by this Welsh Government. That investment is futureproofing our economy. But the position that this company found itself in was such that it could not survive without important contracts from Honda. Their troubles were compounded by a decision by Volvo to adopt an engine that would use an electric transmission that would not require cabling. Those two factors put the company's future in jeopardy here in Wales.

The Member identified examples in Ottawa of success, but the obvious difference between Ottawa and Wales is that Ottawa is not currently in the European Union, facing crashing out, and this is a major threat for the sector. And if we look at other businesses across the UK right now, that survey that I mentioned earlier, we'll find that 11.8 per cent of firms in the automotive sector, almost 12 per cent of businesses in that important sector, have already divested from UK operations. The sector is potentially at the point of meltdown as a consequence of the indecision, inaction and the failure of the UK Government to actually act to support it. And, as I said, tomorrow I will be pressing the UK Government to back up positive rhetoric about the future of the automotive sector with hard cash for the Kingfisher fund.

I think there are two major opportunities in south Wales, in terms of the transition that the Member identifies, and I would agree that we do need to have a seamless transition to, if you like, new automotive sector activity within south Wales. First of all, the obvious opportunity is with alternative propulsion systems—most obviously electric, but also, potentially, with hydrogen. We're working on those opportunities, not just with the Wales automotive forum, but also, I have to say, with BEIS at a UK Government level, trying to attract as many investment opportunities as we possibly can and challenge fund grants as possible to Wales. The other big opportunity, Llywydd, concerns the lack at the moment of recycling facilities for batteries, and also for composites. So, again, we're looking at opportunities for this region to capitalise on that shortage of such facilities. 

And finally, Suzy Davies. 

Diolch, Llywydd. I'll be very brief, you'll be glad to hear. The first question is about the timing of this announcement. We also know that INEOS is coming to just outside Bridgend in the near future. Is there any good news about the opportunity potential here, because the redundancies won't be for a year? Is there any news coming from INEOS that may offer some comfort to the workers there?

Secondly, I hear what you say about Aston Martin Lagonda; do announcements like this risk those growing shoots of confidence in what we offer to the automotive industry here in Wales?

And then, just lastly, some of the announcements we've had lately on company and firm closures have been from much smaller companies, supply-chain companies. Is there anything that Welsh Government is doing at the moment to help that type of company, as opposed to your Dawnuses and your Tatas, just really lift their eyes and understand that there are issues for them in the future and that they might want to think about diversifying and not relying so much on one individual major customer?

Absolutely. I would agree entirely with Suzy Davies on this point. And the reason that we hosted the summit for Honda supply-chain businesses was because we wished to ascertain just the extent to which businesses were exposed to Honda's decision and whether they were looking at diversifying and whether there was any prospect of those businesses attracting contracts from other OMUs.

Now, in terms of diversification, some businesses are so specialised within the automotive sector that it's very difficult for them to find or develop alternative products to manufacture or assemble in Wales, but for others there most certainly are opportunities.

Members in north Wales will know that I recently wrote to them concerning the Vauxhall plant in Ellesmere Port. After the Honda announcement, I asked officials within the Welsh Government, working with officials in the UK Government, to gather intelligence on Wales's exposure, given that PSA have said that future investment in the Ellesmere Port plant is dependent on the outcome of Brexit negotiations. 

As a consequence of that evidence and intelligence-gathering effort, we've been able to appreciate the extent to which the supply chain in Wales is exposed to the potential loss of Vauxhall. It's my intention, as a next step, to convene a further summit of all automotive supply-chain operators in Wales—there are many, and they do employ a huge number of people—to encourage them to look at diversification, to identify opportunities with them, to work with them where possible and to plug into opportunities in the UK industrial strategy, as well as through the economic action plan, to ensure their long-term viability.

Suzy Davies also makes the very important point that we shouldn't lose sight of the fact that there are significant numbers of jobs being created in south Wales right now in the automotive sector. INEOS will be creating 500 jobs in the coming years—initially 200 at the start-up point. I was pleased to note very recently that Aston Martin Lagonda announced that it intends to increase the number of people that it takes on for the St Athan site from 700 to 1,000. So, significant numbers of jobs are being created.

The common theme, of course, with the two is that the Welsh Government has been critically important in attracting those businesses to south Wales. It's my intention to maintain the effort that we initiated in drawing as many employers as possible and as we can to a region that is suffering as a consequence of decisions by Ford, Honda and other businesses.

Thank you, Minister.