Millions of pounds for supporting Scottish firms were lying dormant in bank accounts while Michelin Dundee spiralled into decline.
The planned closure of the site has been blamed on dwindling demand for smaller tyres, which is the factory’s mainstay, as well as cheaper Asian imports.
Scottish Labour leader Richard Leonard said the unspent cash from Scottish Enterprise could have helped the Baldovie site diversify for a changing market.
The government agency, which distributes public funds to help businesses thrive, recorded a £13 million underspend in 2017-18.
Scottish Enterprise said they could not dip into the fund, which involves European investors, without a “private sector fund manager willing to invest in a Scottish company”.
Asked if the cash could have been spent on helping the Dundee plant diversify, Unite’s Bob MacGregor said: “Yes to get machinery to build bigger tyres, absolutely.
“That might have very well helped our plant not be in the situation it is at the moment.”
Accepting the benefit of hindsight, he added: “But that wasn’t the strategy by the company and the market has changed rapidly.”
The failure to use SE funds was last week blasted by MSPs as “unacceptable”.
Writing for The Courier, Mr Leonard said while the £6.3m Michelin has received in regional support assistance since 2011 is welcome, millions more was unspent when it could have made a major difference to the site’s fortunes.
“The Scottish Government and Scottish Enterprise must immediately assess what funds it can provide to support the Michelin factory in Dundee beyond 2020, given the money clearly exists and is under-utilised,” he writes.
“Of course, this money should not be handed over without conditions – and a primary use for any funding should be to help Michelin diversify the Dundee factory to protect its long term future. With cheap imports flooding the market from abroad, it is right the Scottish Government intervenes to support this vital industry.
“Anything less risks not just the future of Michelin in Dundee, but the whole recovery of the city itself.”
A report was published by Holyrood’s economy committee on Wednesday last week revealing the scale of withheld funds by Scottish Enterprise, an arm of the Scottish Government in charge of promoting economic development, enterprise and innovation.
As well as the £13m underspend last year, only £500,000 has been invested so far in 2018-19 from a £10m pot for Scottish-European Growth Co-Investment Programme, as of last week.
The powerful group of MSPs then called for “urgent action” to ensure “this money is spent to benefit the Scottish economy”.
Steve Dunlop, the chief executive of Scottish Enterprise, is due to take a senior role in the action group charged with protecting Dundee staff, which first meets on Monday.
Mr MacGregor said he expects Mr Dunlop to suggest using their unspent funds for Michelin.
On whether that would happen, a Scottish Enterprise spokeswoman said: “As part of the action group established by the Scottish Government, we are committed to working with partners to protect the future of the Dundee site and will do everything within our powers to find a viable solution and secure employment for the people who have been left devastated by this announcement.”
The underspend figures, the spokeswoman added, refer to a three-year pilot fund where SE and the European Investment Fund “invest alongside European-based private sector investors on equal terms”.
She added: “The nature of this type of investment means that we cannot spend it until there is a private sector fund manager willing to invest in a Scottish company.”
gmcherson@thecourier.co.uk
