Examination of Witnesses (Questions 80
WEDNESDAY 22 NOVEMBER 2000
80. What do you think? Do you think they are
being honest or not? I must press you on this question.
(Mr Hopwood) I have suggested to the company that
we ought to think the unthinkable and have a debate about where
the company is going and what happens if the problem stays. How
long are they going to take losses? They are massively in debt
now. Before the merger they were cash rich. Now they have a massive
debt. I think it is something like 1.7 billion. I can only think
what might happen but I would not want to be seen as a hearse
chaser, (for want of a better expression), and I do not want to
be one of gloom and doom. If things turn around, that the pound
weakens or the euro strengthens, which is more likely, then this
could be turned around. But at the moment it is looking pretty
81. Going back to the morale of the workers.
In Port Talbot there are 200 in the R&D division, similar
numbers in the others, but a new facility is to be built in Sheffield
with a total of 450 employees. How many out of the 200 at Port
Talbot are thinking about, or will be, moving to Sheffield?
(Mr Jones) The number is not known yet. People obviously
have to make some very hard decisions so the final figure is not
known yet. I can tell you from the move that the department I
was in, we were a section of 33 people. The section was moved
out to Holland and only five out of the 33 went. I do not know
if that can be used as a template.
82. What about Rotherham, which was not factory
based or work-split based. Are the people in Rotherham, in a sense,
more suited to Sheffield because of the easier geography, who
are more likely to move from Rotherham?
(Mr Hopwood) To be honest, the unions, my Union in
particular, pushed to avoid competitive interviews. This is because
I thought that would make matters worse, so there will be some
automatic selection for jobs. Quite clearly, those people who
are already in Rotherham for any job that they can do, will simply
step across the motorway into Sheffield. I do believe that it
is unlikely that many people will move from Wales or from Teesside.
83. So out of the total of 450 jobs, you think
a lot of those will be new appointments then?
(Mr Hopwood) They will need to findI cannot
be exactaround 130 or so. If everyone could do the job
that is available in Sheffield in the new establishment, and if
everyone moved from Swinden Technology, then they would still
need to find 100-odd new jobs. Now I do not believe that those
will be filled from people from Teesside or South Wales.
84. Do the workforce in Rotherham feel more
positive about Sheffield than Middlesbrough and Port Talbot?
(Mr Hopwood) I do not believe they do feel very positive.
You obviously have not seen the site in Rotherham. It is full
of listed buildings, it has bowling greens, football pitches,
everyone goes jogging at a lunch time. People are looking at that
element as well. It is on the old Orgreave site, next to the airport,
that they are moving to, so there is a little bit of that about
it. I also do not think that people think this is the solution
to British Steel's problems either.
Chairman: We will go back to Dr Kumar. I wish
it to be known from the Chair that I am not unsympathetic to morale
and social problems and so on but I do think that we should go
back, as far as we can, to R&D.
85. When the restructuring of the technology
centres was announced, what steps did Corus take? Comparing this
country with what happened in Holland, did you get the same treatment
here as they get in Holland? Would you outline the steps.
(Mr Hopwood) I have already touched on the fact that
there is a pact, an industrial relations pact in the Netherlands,
where people cannot be made redundant for five years. A five-year
pact between the company and the unions. The numbers involved
are very, very small.
86. No, I am not asking that. What I am asking
is: what consultation did Corus make before its announcement that
it was going to close certainly the three centres here? Did it
just appear out of the blue one day or was there a warning initially?
I am trying to draw a comparison between how things are done by
Corus in this country and how they are done in Holland. I want
procedures and comparisons really.
(Mr Hopwood) There appears to be much more openness
in the Netherlands than there is in the United Kingdom. When asked
straight questions they appear to get straight answers in the
Netherlands and the dialogue is a very open one. What tends to
happen here is that there is an announcement on the Friday that
a plant is going to close on the following Mondayperhaps
not on the Mondaybut an announcement about redundancies
is going to be made. One of the things that is, in a way, helpful
is that this is a long-term redundancy situation, in that the
new site is to be built and it is not until the end of next year
that people will have to leave if they do not move to Sheffield.
So there is a long opportunity for dialogue. However, the problem
is that the unions do not appear to be in a situation where they
can actually change the company's view before they make the decision
or amend it very much, although we do get the impression that
in the Netherlands there is an indication that perhaps it might
be the case that they do listen.
Dr Kumar: How many hours' warning did you have
that they were going to close down three centres in this country?
Chairman: Dr Kumar, can you return the session
to R&D, please.
Dr Kumar: I am trying to research what warning
of R&D closures was given to the workforce. I am only trying
to ascertain that.
87. Right. However, I think you might be missing
the opportunity of asking more pertinent questions, when we have
to move on in a moment or two.
(Mr Hopwood) The announcement which was made put a
spin on the fact that Corus were opening up a high-tech centre
in Sheffield. The actual fact that 280-odd jobs were going to
disappear was played down.
(Mr Jones) Could I say it did come as a complete shock.
We were just pulled into a hall and it came out of the blue, so
it was a total shock. For the tin plate part of the business we
were given four months' notice approximately before we had to
agree to relocate to IJmuiden.
Sir Paddy Ashdown
88. Chairman, I apologise for not having been
here throughout, so please forgive me if this has been covered
before. It really is depressing to listen to all of this. It is
not my job to put words in our witnesses' mouths, but would I
be wrong in concluding that it is your view that the reassurances
we received in respect of R&D from Corus when they gave evidence,
is little more than public relations palliatives designed to cover
a situation rather than identify the facts as you see them?
(Mr Hopwood) I wish I could say that was not the case
but I do believe you are absolutely right. The company has a PR
job to do and that is what they are doing. I would like to believe
that the new centre in Sheffield will be a massive success but
I have grave doubts.
89. They also painted a pictureI wonder
if you would agree with thisof bright young things wanting
to be flexible and mobile in this brave new world of ours, in
high-tech and so on. That does happen in some industries. Why
should it not happen in your industry? Why should that not be
happening or is that just part of the PR job?
(Mr Hopwood) I think it could well happen, if it really
is a state of the art centre and there are connections with universities
and everything else. The problem is what happens in the meantime
when we are losing all that knowledge base, all those skills?
That cannot be replaced overnight. You cannot replace people with
20 or 30 years' experience with graduates straight from university.
It is impossible. It may be that the centre will be a massive
success in ten or 15 years' time. That is, if Corus still exists
in ten or 15 years' time. It might be a success then but our worry
is that, to some extent, the company is being put at risk in the
way they are dealing with this particular
90. But you do not deny that they are taking
in younger people. Are they research and development-literate
in those fields or are they versed in cooking and spin doctoring?
(Mr Hopwood) As I understand it, at present the only
real entrythere are other routesbut the main entry
into Corus (UK) is through a university degree. You need a degree
to get into the company now, whereas at one time you would get
through via the apprentice route or other routes. Of course these
people do not always stick. They are transient, whereas sometimes
the home grown variety, people who have come through apprenticeships
and do a degree later, have a loyalty to the company and they
do stick. It is true that the company have been taking on something
like 200 graduates per year, you have to applaud that, but they
are not all in R&D.
91. How many are in R&D?
(Mr Hopwood) I do not know.
92. What sorts of degrees do they have? Social
sciences or what?
(Mr Treadgold) They are still taking on graduates
in the R&D business. I really could not tell you what number.
93. That is rather important, is it not? If
you are going to rubbish the arguments it might be helpful to
quantitate a little. I do not want to be aggressive; I am trying
to be helpful, so that we can get a full picture of what is happening
(Mr Treadgold) R&D is still able to recruit. We
are still offering jobs that graduates clearly find attractive.
We take graduates on in scientific and engineering disciplines,
covering a wide spectrum of the degrees that are on offer in the
United Kingdom universities. I think we do a good job in training
those graduates. We have accredited training systems with most
of the engineering institutions, and graduate intake find that
attractive. So we do still have success in recruiting new graduates.
We sponsor graduates through universities as well. That is a good
way of doing it. The problems then arise in retention of graduates.
I suspect that Corus might not be unusual in that respect. I think
graduates are a more mobile sector of the population than anybody
else. So we take graduates. We train them, we get them maybe up
to the point where they can start doing a useful job, but we are
not very good at keeping them beyond that. We do keep some. But
what we have singularly failed to do is to take graduates that
other industries have trained, because they are losing people
as well, so there is a movement of trained graduates and the company
has never really succeeded in plugging into that. I do not think
that what is happening at the moment, in terms of the merger and
the demanning and the well known problems of profitability, I
do not think that helps us in recruiting people at that sort of
level, the people who are starting to become useful. So we do
have a problem in retaining and buying in partially trained graduates.
(Mr Jones) There is a scheme run at WTC, an engineering
doctorate scheme. This is run in conjunction with Swansea University
and has been quite successful. It is proposed that it is going
to keep going but, of course, you have to ask yourself where will
these people get guidance and back-up if many WTC personnel are
94. The bulk of the job losses that we have
been told about appear to be borne by United Kingdom centres rather
than at the IJmuiden Centre in the Netherlands. Why do you think
this is happening?
(Mr Hopwood) It does appear that all the process engineering
and technologies are moving to IJmuiden, so many of the jobs have
been exported effectively to the Netherlands. Some people will
move from the United Kingdom to those, but if they will not move,
then again they will have to be recruited over there. It was initially
suggested that they might lose about 90, if I recall. We do not
believe they will lose 90. We believe that those jobs will be
absorbed within that IJmuiden site.
95. We have heard a rather depressing scenario
of problems which have directly affected your industry, although
it is clearly not necessarily limited to your industry. What do
you think are the conditions in the United Kingdom that discourage
R&D in engineering, and do you think there is anything that
Government can do to improve matters?
(Mr Hopwood) If the Government was to raise the status
of engineering and technologists, clearly that would have an impact.
In Germany, for instance, engineers and the like are regarded
as very important people. Perhaps it is because of the massive
downturn in manufacturing that people do not see that they need
to go into R&D. I also look after some of the responsibilities
in the AEEU for pharmaceuticals and chemicals. It seems like America
is the mecca for R&D, yet jobs are even being lost in the
UK in pharmaceuticals.
96. The treatment of engineers as compared between
Britain and Germany is a long-standing cultural problem. How do
you think the Government can actually get involved and help?
(Mr Hopwood) The statement by the Prime Minister before
the election was the priority was "education, education,
education", and education means teachers being regarded as
very important in society. Without good teachers then we cannot
prosper, ignorance causesI am sorry, I am getting on my
soapboxall sorts of problems, and again with technologists
and engineers we should give them the respect they are entitled
97. Thank you very much. I think we have more
or less come to the end, but before I sign off and thank you,
could I just put one point to you? If you feel I am giving you
too short a notice of this point and you prefer to write to the
Committee, I understand that, but we have heard a pretty depressing
picture this afternoon; we did not hear a very bright one when
we were hearing it from the management, who you would expect to
put the best spin on it, and now we are hearing it from the union
side we are probably hearing it as it is and it is even less encouraging;
but during the course of the evidence you have suggested that
there probably was a need for British Steel to take some action
before it went over the top of the cliff and lost everything and
therefore there was a need for some merger or some restructuring
and you were realistic enough to agree with that. So taking that
as a given, how would you have liked to have seen this restructuring
taking place so it would have been better done as far as all your
members were concerned and your R&D members in particular?
(Mr Hopwood) The uncertainty is the big problem. People
cannot be confident within a company when at one time they say
the strategy has to be to have technology within the businesses
and then they do a complete reversal a few years later. When the
Board director, Dr Edington, says that technology has to be linked
to the businesses and a single unit will not be a success but
then a few years later that is exactly what they do, how can that
be building confidence?
98. So you are saying that when the chips were
down principles went out of the window, or words to that effect?
(Mr Hopwood) Yes, that will do nicely.
99. Thank you very much indeed. If there is
anything you think about on the plane back home or tomorrow morning
when you are having your cornflakes that you wish you had told
us which you have not, please feel free, any of you, to write
to us and add those comments because it will be a week or two
before we do our report and those comments can be incorporated
as written evidence to this Committee. We are very grateful to
you for finding the time to come and be with us; we are sorry
we had a ten minute delay while divisions took place but that
is part of the hazards of this place. You have given very clear
evidence to us in writing and now in person this afternoon and
we are very grateful to you, Mr Hopwood and, of course, Mr Treadgold
and Mr Jones. Mr Jones, while we are saddened to learn you will
have to have a new career, you are going into a very important
one. Mr Hopwood said that teaching is one of the most important
things and before I get on his bandwagon, he also said that banishment
of ignorance is one of the best things we can do in society and
we all know that physics teachers are in the shortest possible
supply and for the rest of your career you will be doing something
which is extremely worthwhile, even though you have been rather
forced into it, possibly, from circumstances you would prefer
not to have happened, but we wish you well. We do thank you all
very much indeed for your help this afternoon.
(Mr Hopwood) Thank you.