Firm shuts down
Christmas Eve blow as 310 jobs lost at components firm Kaiam
Kaiam workers were handed news they feared
More than 300 jobs at a data centre components plant in Livingston were told today they were out of a job after it fell into administration. A handful of employees at Kaiam Europe and Kaiam UK will be kept on to help administrators from KPMG find a buyer.
The West Lothian plant has been manufacturing parts used for high speed data transfer in data centres since 1998. It fell into administration on Friday, just 24 hours after workers were told not to turn up for work until the new year.
KEL had been facing declining work levels in 2018, which, coupled with a high fixed cost base, resulted in the business facing significant cash flow difficulties.
The joint administrators Blair Nimmo and Alistair McAlinden convened a meeting of all employees today and announced that due to the trading losses, the absence of any material customer orders, and significant fixed costs of operating the Livingston facility, they had no option but to make 310 of the 338 employees redundant with immediate effect.
Mr Nimmo said: “We fully recognise that redundancies at this time of year are particularly difficult. Our main focus during this challenging period is to work with all affected employees alongside Scottish Enterprise, Skills Development Scotland and West Lothian Council to ensure that the full range of support is available to them.
“Partnership Action for Continuing Employment (PACE), the Scottish Government’s partnership framework for responding to redundancy situations, has already mobilised and can be contacted on 0800 917 8000 for support. We are also liaising with the UK Government in relation to the timing of redundancy payments via the Insolvency Service.
“In the short term, we are exploring all available options for a sale of the business and would encourage any interested parties to contact us as soon as possible.”
KEL is a subsidiary of Kaiam Corporation, a Calfornia-based organisation, which is not subject to these Administration appointments.
Minister for Business, Fair Work and Skills Jamie Hepburn, said: “The employees affected by today’s announcement from Kaiam Livingston are our immediate priority and we will do everything in our power to help those affected by redundancy. It is an especially difficult time of the year for employees to learn such news.
“Scottish Enterprise has been working closely with Kaiam to explore all possible options to support the business and its staff, and I am disappointed that a solution could not be found to turn the company’s situation around. Scottish Enterprise will work with the administrators to understand the potential options for the business going forward and explore all possibilities to rescue the jobs.
“Our PACE team were present at the meeting and stand ready to offer their full support to staff to help them find alternative employment.
“By providing skills development and employability support, PACE aims to help those affected by redundancy to get back into work as quickly as possible. PACE has a strong track record in doing that, and I hope the affected staff can take at least some reassurance from that.
“The administrators have advised the redundant employees that they will not receive their December 2018 salary and will require to claim this, subject to statutory limits, from the Insolvency Service (which is part of the UK Government’s Department for Business, Energy and Industrial Strategy).
“I am concerned about the impact this will have on families, particularly at this time of year. KPMG will be making urgent representations to the Insolvency Service that they accelerate the payment process from their usual 4 to 6 weeks and I will write to the UK Government to encourage them to help with that request.”
“People being told they are losing their jobs on Christmas Eve is simply disgraceful. What matters now is that every effort is made to support the workers and their families,who have been failed so badly.”.
Earlier, Livingston SNP MP Hannah Bardell said attention would turn to finding opportunities for Kaiam’s workers and questioned why the company had not engaged with government agencies which loaned it money.
Kaiam was given a £850,000 Scottish Enterprise grant in 2014 to relocate some of its production from a site in China to Livingston.
“They have £4m on their order book so there’s work there to be done but at the moment they can’t pay their bills,” Ms Bardell said.
Local people have clubbed together to donate Christmas gifts for the workers families affected by the closure.