Examination of Witnesses (Questions 60
- 79)
WEDNESDAY 22 NOVEMBER 2000
MR GORDON
HOPWOOD, MR
PETER JONES
AND MR
CHRIS TREADGOLD
60. Concerning the job losses that are taking
place in Britain—you said that because of other synergies
in certain areas you would expect job losses, as it were—is
the total production and total market share for Corus as a company
fairly level, or has that been cut at the same time as redundancies?
(Mr Hopwood) I believe they are losing market share
but that is to be expected, given that they cannot compete.
61. The United Kingdom end of it, but the Dutch
end of it should be gaining market share, should it not?
(Mr Hopwood) I cannot speak for what is happening
in the Netherlands, at the moment. I have not detailed information
on this, I am sorry.
Chairman
62. Just as a matter of interest on that point,
does your Union cover the Netherlands side of Corus?
(Mr Hopwood) No.
63. Right, if it does not, then do you have
a close liaison with a union that does?
(Mr Hopwood) We have a relationship with them. It
is the FNV Union over there. To some extent we are jealous of
some of their agreements in that they have a five-year guarantee
of no redundancies, which obviously we do not have here. It seems
it is much easier to make people redundant within the United Kingdom
than it is abroad.
Dr Gibson
64. A closed shop.
(Mr Hopwood) They have much lower density in the Netherlands
than we have here, much lower. Their membership is something like
40, 50 per cent. We are round about 80-odd per cent, yet we do
not appear to be able to deliver very much protection as far as
our members are concerned.
Dr Williams
65. Following on from your reply to the Chairman,
it is folk lore in South Wales that whenever any companies closes,
it is cheaper to make people redundant in Britain than in mainland
Europe. That is very much your thinking, is it not?
(Mr Hopwood) I am not sure, Dr Williams, whether it
is cheaper but it certainly appears to be easier.
Dr Turner
66. We have talked about the width. Now let
us turn to the quality. What do you think has been the effect
on the quality of research at Corus as a result of the merger,
and how do you think the input from Hoogovens has affected the
R&D capability of Corus?
(Mr Hopwood) My view would be that the morale of the
people in R&D in the United Kingdom is at absolute rock bottom.
That must have an effect, in my view, on the way that people perform.
I do think what people cannot understand is the complete reversal
from the way British Steel said they wanted to go in 1995; when
they said they wanted to lock in the technology departments into
the businesses, and even said that a separate organisation within
the company for technology would be the worst thing that they
could possibly do; yet that is exactly what they are doing. People
cannot understand exactly what is happening here. I do think it
is having an effect on the way people are operating. It has got
to be detrimental.
(Mr Jones) On behalf of the Welsh Technology Centre,
I would just like to say that morale is really at rock bottom
there and it does have an effect on productivity. The Dutch approach
is a different way of working. A lot of time is spent accounting
for time but there is a real fear for the future and that is affecting
people's outlook a lot.
67. Your memorandum to the Committee states
that: "merging with an organisation whose goal appears to
favour longer term objectives should be beneficial in achieving
this change in emphasis." The merger has been in place for
a year. Do you think there is any sign that Corus has adopted
a more long-term attitude to R&D than was previously prevalent
in British Steel?
(Mr Hopwood) I would say no. Traditionally, in the
United Kingdom, the customer has been the production plants. They
have always been very, very careful about the amount of money
they wanted to spend on R&D. Recently in Teesside, for instance,
they have suggested that they are only prepared to support R&D
until 2001. They are not prepared to spend more than something
like £200,000. It has always been difficult and I certainly
do not see the introduction of a third party, Dutch colleagues,
as changing that very much; although it has got to be said that
the new Director, Hans de Wit, does appear to be very committed
to technology and is certainly talking a good fight.
68. To cite one specific example, there is a
crisis in the British Rail industry at the moment. One of the
factors in that crisis which seems to be emerging is the actual
properties of the steel used and design of rails. Have you got
the R&D capacity to tackle a problem like that effectively
and quickly?
(Mr Treadgold) I believe the answer to that is yes.
We do have a group of people based in our technology centre in
Rotherham, which is somewhat confusingly called Swinden Technology
Centre, who work on the properties of rails. They work very closely
with our manufacturing plant up in Workington, who supply Railtrack.
I am led to believe that there is very close liaison between Railtrack
and Workington with input from technology helping that. So, yes,
I believe we have the capability of dealing with Railtrack's problems.
69. Good. Dr Edington told us that he felt that
R&D at Corus was becoming far more embedded in the company's
decision process. This was allowing the company to be more consumer-led
rather than process-led. Have you seen any evidence of this? Do
you think such a change would be helpful to the company's long-term
future?
(Mr Treadgold) No, I do not see any evidence of that.
I think that having R&D on a table where the decisions are
taken is beneficial—or would be beneficial. It has happened
in the past. We have had full Board members, like Dr Edington
himself, who was on the full Board of British Steel. That is not
the case now and I find it difficult to understand the comments
that Dr Edington is making.
Chairman: Dr Kumar, you have arrived just in
the nick of time.
Dr Kumar
70. Thank you, Chairman. My apologies to you
and your colleagues. I was detained by the Prime Minister, if
I can say that, in talking about steel matters. Mr Hopwood, just
to follow on from the question that Dr Turner has asked. Regarding
Dr Edington's comments last week, when I asked him about the downgrading
of research and not having an Executive Director of Technology,
when I asked him if he was deserting a sinking ship to that he
protested very loudly—in fact, too loudly for my liking—but
he thought that was not happening and that he would be staying
to sort people out. If you recall, he made those comments. Do
you believe him when he says that?
(Mr Hopwood) Frankly, I do not, because looking at
a meeting which took place with Dr Edington on 13 October 1995,
to a question that was put to him (these are the company's notes)
about moving technical staff into BSSP, which is the strip products
business in South Wales, did this mean that they were more likely
to be shed at the next downturn? He said then that centralised
R&D with walls around it would be the worst situation in any
future downturn compared to technology staff embedded within the
businesses. Yet that is exactly what they are doing. They are
moving into a centralised technology centre in Sheffield and closing
all those that are in the businesses. They are also decreasing
the number of people who will be transferred into those businesses.
Originally it was 150. It is already only 100. We are expecting
that to shrink again.
71. So you would agree with me that Corus is
actually downgrading research, as it was seen in the previous
British Steel environment. I hope you agree with me because I
have just conveyed that message to the Prime Minister very loudly:
that this was the future that we were looking at. Do you agree
with that? I hope you agree with that.
(Mr Hopwood) Yes. I challenge Dr Edington, if he really
does care, to stay and look after the people who put their loyalty
in him.
Chairman
72. Can we be clear on one thing. The centre
at Sheffield, to which Mr Hopwood has just referred, is that based
on, or close to, a plant in Sheffield?
(Mr Hopwood) No. I think it is on the old Orgreave
site.
(Mr Treadgold) There is still some small capacity
in the Sheffield area.
73. But not major?
(Mr Treadgold) Not major, no.
Chairman: Thank you very much.
Dr Kumar
74. So ideally you would like Mr Hans de Wit
to be on the Board or given the same sort of respect that his
predecessor had as a Director of Research?
(Mr Hopwood) I think that would send a very strong
signal to the people working in technology R&D, that the company
are 100 per cent committed to R&D if they put someone of that
calibre on to the Board.
75. That is the feeling of the workforce, of
the technologists, scientists and engineers that you know?
(Mr Hopwood) Ask my colleagues.
(Mr Jones) The point that you touched on about the
relocation of the new building in Sheffield. This is in contrast
to IJmuiden where they work right next to the firm. We feel that
most of the work we did previously was customer oriented, where
the customers were the works, and we did a lot of developing processes
techniques and so forth. This affinity with R&D and business
units is going to be lost. We feel this could be a precursor to
losing a lot of production in this country and a lot of it going
out to mainland Europe.
76. The merger of the three research centres
into one—what is your feeling? You recently submitted in
your memorandum that it was not viable from the start. Tell us
why, because obviously you feel very strongly about this issue.
(Mr Hopwood) What I cannot understand is that if it
was right in 1995, with all the recent major changes is not the
R&D business in the process of being dismantled? The answer
to that question from Dr Edington was for British Steel to get
as close as possible to its customers. Low cost was important
but customers wanted to see clear commitment to technology throughout
the company, not just in a separate organisation within the company.
This is a separate organisation. He also said that companies with
few technical staff in their businesses find that problems are
poorly defined and are those that the business itself should have
solved. So it seems to me that the remoteness of Sheffield will
not help the customers. The customers are the strip business,
the sections business. There is a distance between the two now.
Dr Kumar: The Prime Minister has been regularly
emphasising a knowledge based economy; he wants technologists
and scientists.
Chairman: Dr Kumar, we have a division. Before
you go further in your question it might be an idea if you stopped
now. I am going to have to suspend the Committee for ten minutes
and we will be back as soon as we can. You will understand the
process we have to go through.
The Committee suspended from 16.45 pm to
16.55 pm for a division in the House. Chairman: We will resume
the Committee. Dr Kumar was about to ask a question.
Dr Kumar
77. I was saying that the Government is trying
to create a knowledge based economy—trying to encourage
technologists, scientists and technology. Given what Corus has
been doing, do you see that we will have a loss of experience
in scientifically skilled staff through early retirement? What
sort of message does this send to our young people, to the workforce
as a whole, and to our country, that really skilled technologists
and scientists are not really needed because it appears that many
of them are going to be put on the scrap heap.
(Mr Hopwood) It was quite ironic that Mr Bryant spoke
about the quality of physics teachers and the lack of them. The
spin-off to this might be that my colleague, Peter Jones, is going
to become a physics teacher as a result of not having a job in
Corus in South Wales. So there is a possibility that there might
be spin-off in that direction. Seriously, I do think that Corus
will find it more difficult now to recruit people. Technologists
are not the highest paid in the United Kingdom and certainly the
United Kingdom do not appear to give regard to its engineers and
scientists. To expect those people also to be mobile—again,
a statement made by Mr Bryant, that when there are jobs for people
they are willing to move—well, people do not move out of
the valleys of Wales. That is why they are there. They want to
stay there. Also, the kinds of salaries that are paid to technologists
are not high enough for them to be totally mobile. It is rather
sad that these skills will be lost there. I think it will be detrimental
to the company also.
78. What about those who are left behind, who
have not been put on the scrap heap, those who are still working.
What is their morale? Can you tell us how they feel, at this moment
in time, the way they are being treated by Corus?
(Mr Hopwood) Peter is directly involved in this. As
I said, he is a casualty, so perhaps it would be better for him
to answer this one.
(Mr Jones) All I can say is that at the Welsh Technology
Centre morale is desperately low at the moment. There is a feeling
of not being wanted, to a large extent, largely by the way things
have been conducted. Dr Edington did make a remark that things
were carried out in a professional manner. That is not always
the case. There have been a number of people who have just been
given application forms after a number of years' service and told
to fill them in, marking their experience and qualifications.
One can ask the question, what happened to appraisals? The previous
managers were not even consulted. It goes together to give one
a feeling of it does not matter how hard one tries to perform.
You are just moved around by top management.
79. Do you think the company is being honest
with the workforce and unions like yourself in its restructuring
of Corus R&D?
(Mr Hopwood) I think they have been reasonably honest
but there is a subtext about what the company wants to do with
Corus (UK) generally. If you wanted to read between the lines,
you could read all sorts of things into the fact that they are
closing down those technology centres in South Wales.
| 
