Employment Outcomes and Plant Closure in a Post-industrial City: An Analysis of the Labour Market Status of MG Rover Workers Three Years On

Abstract

This paper examines how the loss of 6,300 jobs from the closure of MG Rover (MGR) in the city of Birmingham (UK) in April 2005 affected the employment trajectories of ex-workers, in the context of wider structural change and efforts at urban renewal. The paper presents an analysis of a longitudinal survey of 300 ex-MGR workers, and examines to what extent the state of local labour markets and workers" geographical mobility -as well as the effectiveness of the immediate policy response and longer term local economic strategies -may have helped balance the impacts of personal attributes associated with workers" employability and their reabsorption into the labour markets. We find that the relative buoyancy of the local economy, the success of longer-run efforts at diversification, and a strong policy response and retraining initiative helped many disadvantaged workers to find new jobs in the medium term. However, we also highlight the unequal employment outcomes and trajectories that many lesser-skilled workers faced. The paper explores the policy issues arising from such closures and their aftermath, such as the need to coordinate responses, to retain institutional capacity, to offer high quality training and education resources to workers, and where possible to slow down such closure processes to enable skills to be retained and reused within the local economy.

Plant closures, precariousness and policy responses: Revisiting MG Rover 10 years on

“…Drawing on work by Shuttleworth, Tyler, and McKinstry (2005), three dimensions can be taken into account when examining the employment outcomes and trajectories of workers made redundant after a plant closure: (i) the personal attributes associated with workers employability and re-absorption in the labour market; (ii) the local demand and geographical mobility shaping their transition back to employment; (iii) the effectiveness of the policy interventions, their uptake and how were they perceived by the workers. It has previously been argued by researchers that the effectiveness of the immediate post-closure policy response and longer term (pre-closure) local economic strategies combined with the state of (some) local labour markets and workers' geographical mobility, helped to balance the impacts of personal attributes associated with workers' employability and re-absorption into the labour markets (Bailey, Chapain, and de Ruyter 2012), -hence the findings on 90% of workers getting back into work three years on and 60% undertaking some form of training.…”

“…Those among the last to find re-employment (i.e. by the time of the wave three interview) reported a loss in salary relative to their MGR salary, and reported lower salaries compared to those who found re-employment sooner (see Bailey, Chapain, and de Ruyter 2012). Finally, it is worth noting that while nearly a quarter of the sample at Wave 3 were in debt or needed to draw on savings, 36% said that they were just about able to manage on current income and a further 38% feel they were in a position to save some money.…”

“…Harris 1987;Westergaard, Noble, and Walker 1989;Westin 1990;Pinch and Mason 1991;Hinde 1994;Leana and Feldman 1995;Tomaney, Pike, and Cornford 1999;Kirkham and Watts 1998;Turnbull and Wass 2000;Pike 2005;Shuttleworth, Tyler, and McKinstry 2005;Dawley 2007). However, such studies have either tended to examine the nature of plant closures, or their impact on the local economy, and have rarely taken a holistic approach (Bailey, Chapain, and de Ruyter 2012). Moreover, while significant longitudinal studies have been undertaken, the nature of jobs entered into over the longer term has hardly been explored (Westergaard, Noble, and Walker 1989;Turnbull and Wass 2000;Shuttleworth, Tyler, and McKinstry 2005 being notable exceptions).…”

Structural adjustment and the automotive industry: insights for regional policy and programmes

“…The material presented by Bailey and colleagues (Bailey, Armstrong, de Ruyter, Mahdon, & Thomas, 2008;Bailey, Bellandi, Caloffi, & de Propris, 2010;Bailey, Chapain & de Ruyter, 2012;Bailey et al (2014); Bailey, de Ruyter, & Clarke, 2010;Bailey & MacNeill, 2008) needs to be placed in the context of wider debates on the functioning of economies and the development of regions.…”

Industrial closure, regional development and local planning: Multiple narratives of change from the experience of Longbridge, Birmingham

“…This dominance is reflected in the existing Longbridge literature (Bailey and MacNeill, 2008;Bailey et al, 2011;Bentley et al, 2010;House of Commons, 2007;MGRTF, 2006; NAO (National Audit Office), 2006; Thomas et al, 2008), much of which identifies the task force as 'best practice' in responding to industrial failure.…”