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Diageo turns back on public funds offer

Published:  28 August, 2009

Diageo has turned down an offer of a rescue package of public money to help keep its two Johnnie Walker packaging plants in Kilmarnock and Port Dundas afloat, saving 900 jobs.

Unions and high-ranking Scottish politicians have been vigorously campaigning in a bid urge the global drinks giant to rethink its restructuring plans.

But Diageo chief, Paul Walsh, poured cold water on the latest offer. Relations between the Scottish administration and Diageo have been souring over recent months. The company is said to be furious at the attendance of Scottish First Minister Alex Salmond at a rally opposing the closures.

Walsh said that alternatives would be considered, but that an injection of public funds was not an option as the company revealed its results for 2009.

"Our plan in Scotland not only calls for the closure of Port Dundas and Kilmarnock, but also calls for aggressive investment and job creation in our existing two packaging plants. We have planned that and that's what we will execute, absent any other ideas.

"However," he added, "we think that some of the proposals coming forward may seek some hybrid solution, and we need to be very, very careful that we don't compromise the competitive edge in the two facilities that we're trying to invest in, in order to try and accommodate the needs of politicians. If we do, then we put in jeopardy the future of the 4,000 employees that remain.

"If a proposal comes forward and there is a value gap, somebody - and it's not our shareholders - will have to make that up."

In a separate development, Diageo workers plan to turn out in force at the Johnnie Walker Classic golf tournament in Gleneagles to urge leading golfers to give their backing to the campaign to halt the drinks giant's plans to slash their jobs.

The workers are descending on Gleneagles, one of the world's top golf courses, to highlight that the mega-profitable company's cost-cutting plans are unnecessary and are a betrayal of Scotland's workers.

They are hoping that their message will be heard by the golfers taking part in the four day tournament, including the defending champion Gregory Havret, Swede Soren Hansen and Alastair Forsyth.

Jassy Smith, a Diageo worker and Unite shop steward who is helping to coordinate the protest, said: "When people around the world think of Scotland, they think of wonderful whisky and great golf courses, of which Gleneagles is the best there is.

"We are here to tell golf lovers that the home of golf, Scotland, and Scottish whisky are being betrayed by Diageo's plans to cut 900 jobs across the country and ditch its home in Kilmarnock."