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A new employee-owned business has started in Dundee. So why isn’t Co-operative Development Scotland delighted? David Parker investigates.

Seven workers sacked from a failed packaging company in Scotland have returned to work after a 51-day occupation. They are working in the same premises using the same equipment but now they own the business.
Their story was widely reported in the local media and on specialist websites as a triumph for workers rights and for co‑operative business. However, there is confusion about the co-operative status of the new company, Discovery Packaging & Design Ltd. It is clear that the workers have a strong co‑operative ethos but it looks as though the business support structures may have guided them away from a truly co‑operative solution.
At the beginning of March all 12 employees at Prisme Packaging in Dundee were laid off with immediate effect and told not to expect any redundancy pay. Some of the workers refused to leave and occupied of the factory. The situation rapidly became a political fight for jobs.

 

Workers and supporters pictured during the factory occupation in March 2009.  Duncan Brown. Workers and supporters pictured during the factory occupation in March 2009.
© Duncan Brown.

 

In Scotland the local authorities are responsible for arranging the delivery of the business support service Business Gateway. Understandably, the local delivery organisation Enterprise North East Trust was under pressure to move quickly to save local jobs. The trust engaged Dr Jim Urquhart, who describes himself as an organisational psychologist, to help the workers plan and develop a new business.
“During the sit in the group really gelled together,” said Urquhart. “This cohesion gave them a sound platform to build a new business.”
Urquhart wrote a business plan for the group, but had great difficulty in finding finance to start the new enterprise. He said that the banks and other lenders “didn’t want to know”, but eventually they were lucky to attract significant investment from a local businessman who wishes to remain anonymous. Following this investment a bank was prepared to provide support.
During the occupation the workers were also visited by Glen Dott, a project manager for Co-operative Development Scotland (CDS). He also tried, without success, to access loan finance for the new enterprise. He told ns that he did not think that the people involved really understood how a co-operative worked.
Urquhart disagrees. “It’s definitely a co-operative. All the employees have a share in the business and it’s one member one vote.”
The point of contention is the external investor who, Urquhart says, has a significant number of convertible preference shares but no voting rights. Since ns has not examined the company’s articles of association we cannot say whether or not Discovery Packaging & Design Ltd is a ‘proper’ co-operative.
Sarah Deas, chief executive of CDS said she was disappointed that CDS had not been able to provide more help to the sacked workers while they were planning their new enterprise during a fast moving situation. “However, there’s no reason why we shouldn’t provide them with advice on running a co-operative enterprise in the future,” she said.
Despite the confusion about co-operative status, it is clear that the workers are full of enthusiasm for their new venture. ns talked to David Taylor the new managing director, appointed by the workers.
Taylor, who had worked for Prisme Packaging for 15 years, explained that Discovery Packaging & Design provides a bespoke service for cardboard packaging in a wide range of markets including industry, transport, gifts and retail display. “We can package anything from petrol pumps for delivery to Europe to gift boxes for whisky,” he said.
Taylor believes that Discovery Packaging & Design will succeed because the workers are totally committed to it. “This time we are all working for ourselves and we’ll share the profits. There’s a much better morale and that means customer relations will be better.
“In the old business the management didn’t make any effort to get new customers, so when they lost one big contract that was it. They were complacent and you can’t take anything for granted in business.
“The first few weeks have gone well. We predicted that a slow start and we’ve spent our first weeks doing marketing, but now the orders are starting to come in.

07828 454298 discoverytaylor@googlemail.com
www.discoverypackagingdesign.co.uk


 
 
 
   
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