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21 February 2000

Sold off to Hong Kong

New Statesman Scotland

By Alistair Moffat

Five to ten million pounds is not quite a mess of potage, or even a bowl of porridge, but it’s close. It turns out to be the going rate for birthrights in the Scottish Borders. On Monday of this week, Dawson International announced that it was selling Pringle of Scotland to the Fang Brothers of Hong Kong for a price somewhere between these figures. Half the workforce will go, with 140 losing their jobs and 60 being transferred to another company. That is a disgrace, and a very damaging act.

Five years ago, 2,000 Borderers worked for Pringle, the most famous knitwear brand in the world. Now it will be only 200. Not only is it a disgrace that Dawson International could not make profits from a company in exclusive possession of such a powerful brand, it is also extraordinary that it is being sold off so cheaply. In Hawick and Galashiels, 184 years of human investment has gone into making Pringle a recognisable name virtually everywhere. And the inability to exploit the relatively recent piece of good luck in signing up Nick Faldo to wear the brand at every major golf championship, and even lift a few trophies and deliver miles of media exposure for the pullovers while he was at it, is frankly staggering. On the next page, Alan Taylor describes the amazing growth of the golf industry, and with Faldo on board, it is more than surprising that a success could not be made of golf kit alone.

In an abject press release (which, incidentally, may be the first coining of a new euphemism for sacking lots of people – “manufacturing realignment”), Paul Munn, Dawson International’s chief executive, confesses his company’s failure: “Fang Brothers have the necessary resources and brand-building expertise to maximise the potential of Pringle.” And Dawson International does not – even with a brand that is already built. Munn told New Statesman Scotland that Pringle had been loss-making after a substantial fall-off in turnover. In essence, this is because the demand for low- to middle-market knitwear can be more cheaply served by manufacturers based in places where costs are lower. And Pringle could not compete.

Well, if Munn knows that, then so do Fang Brothers of Hong Kong. Now that they have acquired one of the world’s best known knitwear brands, they can stick it on products made in places where workers are paid less. It sounds like one of those “hard facts of business” cases. In reality, all it shows is a lack of imagination and a poor understanding of recent history if Munn believes, as his press release says he does, that this sale is the best way of protecting such jobs as are left.

In the past three years, more than 3,000 jobs have been lost out of a working population of only 64,000 in an area where 106,000 people live. The most striking recent example was Viasystems, a US-based electronics company which abruptly decided to close its Selkirk factory with the loss of 1,000 jobs. MPs and councillors fulminated and a genial Scottish Office minister even came to shake his head and a few hands. But, alas, nothing could be done because the company was based in the USA and it had made a cold, hard business decision without taking into account how a society in which it had no geographical or historical stake might be affected. “They are Americans, why should they? That’s the trouble with inward investment,” tutted the tight-lipped politicians, “- business decisions taken abroad for global reasons we don’t understand.”

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Fang Brothers are about as abroad as it is possible to be, and the 200 remaining workers at Pringle could soon find themselves “realigned” if the Hong Kong company decides to site the manufacture of Pringle’s products more cheaply elsewhere.

This latest business decision puts the Borders in deep trouble. Of a once world-renowned textile industry, there remains only a rump. Few other job opportunities loom on the horizon. And as the snell winter winds whistle down the Tweed, what Sir Walter Scott called the “Kindred Ground” looks sad and desolate.

However, Scott certainly believed in magic and for once his romanticism might be well placed. Tuesday saw the publication of the Scottish executive’s feasibility study of the rebuilding of the railway between Edinburgh and the central Borders. The Minister of Transport, Sarah Boyack, came to the old railway village of Newtown St Boswells to commit herself to nothing, but the noises off sound positive. If the flowering Edinburgh economy can be connected to the Borders, people and jobs will come back. Boyack has a magic wand to hand and, if she chooses, she can leap onstage and wave it. If she does, the Borders will be transported, in every sense.

Alistair Moffat