Tullis Russell, the Papermakers

Tullis_RussellMonday 27 April 2015.

To the great regret of everyone involved, Tullis Russell’s papermaking operation at Markinch in Fife, Scotland, is today going into receivership. This mill was the company’s original home, where it made paper continually for over 200 years, from 1809. The crisis was precipitated by the recent bankruptcy of its largest customer, whose orders underpinned the mill’s profitability.

Tullis Russell is employee owned, and has been since 1994. It is worth making four points about that.
1. Employee ownership is not the cause of this closure. When a conventionally structured company fails, economists regard that as evidence of the vigour of the capitalist system; by contrast, when an employee-owned company fails, doubts tend to be raised about employee ownership as a system. All the empirical academic evidence points to extra productivity, innovation and longevity being characteristic of employee owned companies. This has certainly been true in the papermakers at Markinch, and is true of the continuing Tullis Russell operations, in Bollington, England and Ansan, Korea.
2. International pressures have caused the closure of pretty well the whole UK printing-paper manufacturing industry. No ownership system can save a business that is undermined by global competition from better placed competitors. For decades Tullis Russell was, like all UK and European manufacturers of printing paper, under considerable pressure from companies in more favourable global locations. The ability of large international competitors to build $ billion mills in the middle of cloned eucalyptus forests in Brazil, for example, gave them really significant cost advantages. European production of printing paper shrank between 2005 and 2015 from 40 million to 29 million tonnes – there have been large numbers of mill closures all over Europe. In the UK, tissue and packaging mills remain viable but printing-paper mills have closed.
3. In employee ownership the performance of Tullis Russell papermakers has been stellar. All other UK printing paper mills but two have closed. One, Stoneywood in Aberdeen, is sustained only by its global corporate owners transferring into it products from mills they have closed elsewhere; the other, James Cropper in the Lake District, has been kept going by the technical specialties it produces. Only Tullis Russell, because of the productivity and committed cooperation of its employee-owners, stayed viable on its own feet as a paper mill focused on printing grades.
4. Tullis Russell will continue. The Tullis Russell Group has over the years developed operations in specialist coating of paper and other substrates. Its other two sites will continue in operation, both of them consistently profitable and successful in employee ownership, with a turnover of some £30 million. These operations will actually be stronger without the papermaking, which has in recent years sometimes been a financial drain.
Everyone is deeply saddened that after over two centuries pressures outside anyone’s control have ended an operation employing some 480 people, whose committed cooperation and hard work as joint owners kept this business more successful for longer than any comparable mill.

We have to control our leaders

Nicola SturgeonWe punters must be vigilant: we have to control our leaders, not the other way round.
There is a serious danger in any human being having a great deal of power. People with power are told the information that pleases them, rather than the truth that will sting them; they are told that their own ideas are the best ideas; that their own character is beyond compare; that their own actions are just the ticket. If you are in that position, it goes to your head – ask any corporate chief executive. When you have power you tend to see all who question or disagree with you as idiots.
Alex Salmond was at his best when he was running a minority government. He was not in a position to ignore unpalatable facts (except that until we get full fiscal autonomy the Scottish government does not have to face the responsibility for ensuring we create wealth as well as spend it). As the leader of a minority government he had to listen to people who disagreed. After he was given an (unlikely) overall majority things got rougher.
Nicola Sturgeon convinced me to vote Yes, on the grounds that we would have the possibility of getting the responsive government we wanted; but she now faces a problem that most people have failed to deal with successfully – think Stalin, Mao, Mugabe, Hitler, and, even in a less violent, democratic system, Thatcher and Blair. She will, if the polls are right, have a lot of power and standing in Scotland, and few dissenting voices, which will be easy to ignore.
We have to hope that the fact that the SNP will be at best a minority partner in a loose coalition in Westminster will keep her feet – and Alex Salmond’s – on the ground.
We punters must be vigilant: we have to control our leaders, not the other way round.