Siol nan Gaidheal
Foreign Direct Investment in Scotland

With the barriers to free trade collapsing around the world and the increasingly globalised business structure of the world economy, many of our country’s citizens will be acquainted with the significant and ever increasing degree of Foreign Direct Investment (FDI) which has permeated every area of our nation over the past 10 years. Foreign Direct Investment (or Inward Investment as it is more often known) occurs when a firm invests directly in facilities to produce and/or market a product in a foreign country. Of course, many of our country’s citizens will be familiar with the increasingly regular Scottish news item about the setting up of such subsidiaries of a foreign company in Scotland, thus “creating thousands of jobs” for the local population. However, more often than not, this pseudo-economic “investment” in our country involves the most nefarious of foreign companies receiving huge grants of Scottish taxpayers money from English politicians at Westminster in order to bring work to high-unemployment areas, spending that cash on hi-tech equipment and machinery, followed, after only a few months, by the inevitable closure of the factory with the transfer of the machinery to other premises in England. In an independent and self-governing Scotland our finances and our workforce must be protected from the large foreign multinational giants who have no commitment to our country, and it is Siol nan Gaidheal’s duty to show up this sorry state of affairs for the farce which it is.

Over the last five years successive British governments have handed out no less than 220 million in corporate “welfare” to foreign companies in Scotland. The money handed out to these companies comes in the form of Regional Selective Assistance (RSA) with the aim of generating and protecting jobs, and responsibility for it has now been handed down to the Scottish Executive in Edinburgh. Regional Selective Assistance was set up to help businesses in “assisted” areas of Scotland where the decline of traditional manufacturing industries has left vast amounts of people unemployed and the labour market stagnant. However, the apparently well-meaning policy of the necessity for the project to “lead to the creation of new jobs” or “the safeguarding of existing ones” is, of course, open to abuse and blackmail as has recently been the case. If an employer in one of these deprived areas comes to the Scottish Executive asking for a few million pounds more “or else” they will pull out and make thousands of Scots redundant, the government minister will be in no doubt as to which path to take. Corporate blackmail allows our government and our people to be held to ransom like a third world nation that takes in an American multinational. Microsoft, for example, have an annual budget of 50 billion and can buy and sell the host country’s government whenever it wants to. These companies have more money to their name than an African host country’s entire Gross Domestic Product, thereby allowing the multinational the option of doing whatever it deems right in its own eyes.

Of course the nefarious VIASYSTEMS immediately springs to mind, a company whose behaviour is detailed extensively in our Industry section. However, the list of companies which have literally used and abused our taxpayers money and our nation’s workforce is endless.

In 1997, SmithKline Beecham – a pharmaceutical company – demanded 5 million to save jobs at its Irvine-based factory. The Chief Executive of SmithKline Beecham subsequently sacked 3000 workers even though he himself was on earnings of 93 million a year in salary, share options and bonuses – an obscenity overlooked by successive Conservative and Labour governments with their slavish adherence to unbridled liberal free market policies. Another statement of Regional Selective Assistance demands that financial assistance handed out to them must not create overcapacity and therefore create unemployment elsewhere – a policy which has been, and will continue to be flouted by SmithKline Beecham considering their recent merger with Glaxo Wellcome – a merger which has led to further redundancies becoming inevitable despite the fact that their status will continue to be protected by huge grants.

Another foreign company which has seen Scotland as something of an easy touch has been the Swedish car manufacturer Volvo, which in 1996 received 1.4 million of financial assistance in order to save its Irvine car plant. However, as has been the same story with many of its predecessors, Volvo announced that it was selling the car division of its business to Ford and was to cut the size of its 450-strong workforce until its closure in June 2000.

HarperCollins, a publishing company owned by Rupert Murdoch, one of the most unsavoury characters of the 20th century, sacked 300 of their 690 workers at their Bishopbriggs production plant in 1996 before being handed 250,000 to keep the plant open. It subsequently sold the business on to Caledonian International Books who cut the number of workers by 50. Caledonian International Books has now gone into receivership and is to close completely with the loss of all the remaining jobs. Another of Murdoch’s businesses, Sky, demanded 6 million for a call centre in Dunfermline and 375,000 for another in Livingston – for which it was successful in 1996 and 1998 respectively. Despite these companies bringing in jobs, Sky recently announced profits of 374 million – highlighting what a bunch of chancers and greedy bastards their corporate board really are!

And Lite-On, a Taiwanese company, set up a colour monitor factory in Mossend, Lanarkshire in 1997 with a grant of approximately 5.5 million – naturally promising that it would employ more than 1000 people. This was before it laid off 66% of its workforce. Production was totally destroyed that year and the workforce cut to 10 people before the company did what is now increasingly inevitable and closed.

Of course there are many benefits associated with FDI in Scotland such as the incoming capital, skills, technology and jobs – nobody doubts that these are important facets which would nevertheless not be there. However, it is apparent in all of the cases mentioned above that there are two overriding similarities - Scotland’s workforce is at the beck and call of these profiteering liberal-capitalist companies who sell their companies to rivals for big money, simply close the factories down or decide to move to wherever the labour is cheapest. Key decisions that affect our economy and country are taken by a foreign parent company that has absolutely no commitment whatsoever to our country and over which our nation’s government, whether that be in Edinburgh or London (one is not so sure), has no real control.

For an example of one country’s attempt to retain national sovereignty one can look at the example of IBM in Mexico. In 1973 Mexico passed a law requiring foreign investors to agree to a minimum of 51% local ownership of production facilities established in Mexico. IBM were wanting to maintain 100% ownership of the facilities and the Mexican law was able to be used as a bargaining tool to raise the level of investment from $40 million to $90 million, invest in local research and development, use sufficient local content in the plant, expand its purchasing and distribution network and contribute through other minor investments, whilst allowing IBM to retain 100% control.

However, what this government must realise and what any future Nationalist government must take note of is that 99% of all businesses in Scotland employ less than 50 people. Small businesses which are less likely to dump Scotland at the drop at a hat are being overlooked in favour of big, selfish, greedy corporate giants who bail out once they have the rich pickings! This has been proved time and time again by VIASYSTEMS and other fly-by-night companies which create false hopes and expectations and ultimately fail the local population time and time again, causing grief and heartbreak in the process.

Japan offers a more radical ultra-nationalist perspective where the belief that the direct entry of foreign firms, especially American firms, was detrimental to the development and growth of their own industry and technology. Japan therefore blocked the majority of applications for firms investing in Japan unless the firm agreed neither to license their technology to a Japanese firm or to enter in a joint-venture with a Japanese company. However, Scotland’s businesses are in no way comparable to that of Japan. Scotland has failed to recover from the decline in heavy industry and any future government in which Siol nan Gaidheal has a stake must do all in its power to help Scottish companies to innovate and create. A once proud and innovative nation has turned into a nation cowed into apathy with a concurring unwillingness to take risks. One wonders what is wrong with our own home-grown businesses and industry that we must start relying on foreigners to provide it – foreigners who have no allegiance whatsoever to our country.

The scams mentioned above have not just happened once or twice but TIME AND TIME AGAIN. It is far too easy for these foreigners to obtain money from us. There must be proper safeguards put in place to prevent this from happening again, especially after the Viasystems farce. There must be stronger stipulations so that these companies have to return the money if they don’t deliver! These companies should be hounded and pursued for the loss of money and other non-pecuniary loss which the people of this great nation have had to put up with from them and the English politicians at Westminster and their sleazy cohorts in their Edinburgh Labour parliament.

The whole structure of Scotland’s business scene is a mess and clearly shows why the Labour-controlled whorehouse on the hill cannot work! They have shown no consideration for the people living in the Borders who were sold down the river by Viasystems and their “representatives” at Westminster and clearly have no intention of finding out why this happened! The Viasystems debacle and the whole business of inward investment coupled with the destruction of our own home-grown wealth creating businesses stinks! – nothing new to the Conservative and Labour unionist parties, but a severe stink to the people of Scotland who must ensure that this sorry state of affairs is ended with the continuing English and other foreign hegemony in this country.

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