Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 80 - 99)



  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 bad.

Dr Williams

  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 find—I cannot be exact—around 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.

Dr Kumar

  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 Monday—perhaps not on the Monday—but 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.

Dr Gibson

  89. They also painted a picture—I wonder if you would agree with this—of 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 entry—there are other routes—but 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 now.
  (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 leaving?

Dr Turner

  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 causes—I am sorry, I am getting on my soapbox—all sorts of problems, and again with technologists and engineers we should give them the respect they are entitled to.


  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.

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