Supplementary memorandum submitted by
Corus plc
UPDATE OF INFORMATION SINCE THE CORUS SUBMISSION
DATED 4 APRIL 2000
In the time that has passed since we submitted
our evidence last April, a number of things have happened that
have had an impact on Corus both generally and with particular
regard to our R&D. In this memorandum, we will concentrate
on only three:
In our evidence, we identified some areas of
overlap in the new company's R&D. As a result of a thorough
review of our R&D activities, in June we announced that we
would reorganise our R&D, concentrating on only two sites,
a new site located in the UK and the existing technology centre
in the Netherlands. These will be of approximately equal size.
The UK technology centre will be a new purpose-built site, custom
designed to encourage innovation and which will represent a commitment
to the future. At the same time, we proposed to concentrate certain
activities, which are presently split, so that they are carried
out on only one site location. This will require a two-way shift
of staff between the UK and Netherlands. Whilst we acknowledge
that this will be disruptive for the staff concerned, this will
enable Corus to do better research and to do so with a lower overhead.
We are currently engaged in discussions about the final location
for our single UK technology centre, with the aim of completing
the process by the end of next year. This is a very ambitious
timetable, but we are not yet in a position to say anything further
in that regard.
Also, starting since the merger last October,
but particularly focused in the time period from mid-May until
only a couple of weeks ago, we have made a series of announcements
about business organisation and manpower. These have resulted
from a set of business reviews that have identified fundamental
changes in the market place as well as the much more pressing
problems of the continuing excessive value of the £ by comparison
with our major trading currency, the euro. Coupled with a tax
regime in the UK that has loaded costs onto business and changes
in the energy market that will add substantially to our costs
of production, we have had no alternative but to announce changes
in organisation structure that will result in more than 4,500
people leaving the steel industry in the UK by the end of next
year.
Finally, we have announced a number of investment
decisions. In the UK these have been large maintenance schemes,
with the decision to re-line the No 3 Blast Furnace at Llanwern
being the most recent example. Perhaps of greater long-term significance
have been the strategic investments in aluminium and in downstream
processing (for example in electrical steels) that have all taken
place outside the UK and which will add in excess of 2,200 employees
in Germany alone. Unless the economic fundamentals of the UK change
very dramatically, this is likely to be the pattern for the future.
26 October 2000
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