City & Corporate: In the news ... Diageo

Bring us up to speed.

Diageo has found itself embroiled in a very public and potentially damaging spat over its planned closure of two plants in Kilmarnock and Glasgow producing Johnnie Walker whisky. The initial announcement of the loss of 900 jobs was made in July, but in recent weeks the firm has come under increasing pressure from the Scottish Government and trade unions to keep the plants open. On 27 August, the firm promised to weigh proposals to save the jobs, but chief executive Paul Walsh warned 'short-sighted' protests could affect its sales, while a 'senior manager' told The Times the row could turn CEOs away from investing in Scotland.

The reaction?

Dissent against the closure of the plants has been long and loud, led by the Scottish Government and trade unions. This weekend Diageo workers kept the story in the news by protesting at an international golf tournament sponsored by the company. The Daily Record described how 'scrooge bosses' at Diageo declared £2bn profits on the same day they 'slashed workers' Christmas bonuses'.

Who are the PR Players?

Ian Wright is Diageo's corporate relations director. The firm uses Brunswick for its financial PR, Cohn & Wolfe for corporate PR and Hanover for public affairs.

What happens next?

Opponents of the closures have kept the issue in the news - last week union leaders, MPs and workers descended on Downing Street. Much now depends on the firm's response to the proposals from Scottish politicians, local authorities and unions to save the jobs. Whatever the firm's decision, it will need to find a way of explaining the business rationale behind its restructuring without being drowned out by mentions of its £2.6bn annual profit.

900 - Amount of job losses if two plants close.

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