Burberry follows the latest trend

Earlier this month it was the historic HP Sauce factory in Birmingham, now it is the slightly less iconic but nonetheless vitally important Burberry factory in South Wales which is closing for the final time.

There are similarities in both cases.Despite the committed and high-profile fight to keep the factories open, hard-nosed business sense has won the day.

Heinz is moving production of the “very British” HP Sauce to the Netherlands, while that quintessentially British brand of clothing Burberry is switching production to sites in Spain, Portugal, Poland and China.

More than 300 people staged a farewell march at the plant near Treorchy, in the Rhondda Valley, yesterday as Burberry stood firm in the face of months of protests and closed the factory.

The campaign to save the 309 jobs at the 60-year-old site gained a national and international profile, with actors Ioan Gruffudd and Michael Sheen, singer Sir Tom Jones, Manchester United manager Sir Alex Ferguson and singer-turned-TV presenter Charlotte Church adding their support.

But despite the celebrity-endorsement and the decision to take the protests to some of Burberry’s high-profile outlets around the world, the decision to close was never likely to be reversed.

Burberry is following a tried and trusted formula of recent years, making savings to safeguard the future of the brand. Inevitably that has meant switching production to countries where they can get more for less investment.

Of the workers affected in South Wales, 175 have already found alternative work. All staff will receive redundancy packages of no less than £3,000.

There are hopes that a workers’ co-operative, which could employ anything between 30 and 70 people, will be established in Treorchy.

The remainder could seek work in the growing number of call centres and distribution sites already operating in the region or which have recently been announced.

The Plaid Cymru election candidate for the Rhondda, Jill Evans, paid tribute to the campaign and added: “We must make sure this never happens again.”

But that kind of sentiment is far too simplistic. It fails to acknowledge the simple truth that it will continue to happen while businesses have access to cheaper options.

Having grown up and then spent several years working in South Wales as a journalist, I seem to recall similar meaningless pledges were made at the collapse of the coal industry and many of the traditional industries that were the lifeblood of South Wales for so long.

I also remember many decrying the growth in new sectors such as call centres and national distribution sites, complaining the quantity of jobs created didn’t make up for the quality and skilled jobs that had been lost. Now such jobs are being hailed as the silver lining to the clouds created by the Burberry closure.

In defending its decision, Burberry stated that Wales Burberry said Wales was “challenging to compete against the economies of Asia and Eastern and Southern Europe because of its labour intensive low value-added manufacturing industries”. Challenging, but failing – like the rest of the UK.

That is the harsh reality of modern business that the whole of the UK has needed to face up to in recent years but which many are struggling to come to terms with.

Whether it is right, ethically and morally, is a point that can be endlessly debated. Yet that debate invariably will involve those on the periphery and will not exercise the minds of those making the decisions.

While such arguments are shunted back and forth, businesses will continue to make the same choices with the same consequences.