Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 60 - 79)



  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.


  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.


  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.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 25 January 2001