Examination of Witnesses (Questions 112
- 119)
WEDNESDAY 14 FEBRUARY 2001
SIR BRIAN
MOFFAT, MR
ALLAN JOHNSTON
AND MR
DAVID JACKSON
Chairman
112. Good afternoon, gentlemen. This is a bit
of a novel experience for us. This is a new building but this
particular room is constructed for a far bigger Committee than
we have, so we are not normally as far away from you as we are
today. Can I welcome you today. Sir Brian, could you introduce
your colleagues and then we will start.
(Sir Brian Moffat) Yes, surely. Thank
you, Chairman. On my right is Allan Johnston, who is Director
of Human Resources in the company, and on my left is David Jackson,
who is Director of Corporate Relations.
113. Thank you. We are grateful to you for coming
today. We realise that today is the end of the consultation period
and that you obviously wanted to talk to the unions. Part of our
function is to get at the truth and get rid of some of the clutter
that surrounds this issue. The Prime Minister asked you to think
again and you have had these 14 days in which you have taken representations,
have you had second thoughts of any kind?
(Sir Brian Moffat) Can I just correct you on one or
two points and then I will try to answer your question?
114. Yes, of course.
(Sir Brian Moffat) First of all, the consultative
period so far as the announcement was concerned has not actually
started, it starts on the 15th. What we agreed with the national
officers of the trade unions was to give them a fortnight to talk
among themselves and to think about the announcement and, indeed,
to meet with us when they wished in order to ensure that they
had a full understanding of the reasons for the announcement as
well as the detail before the legal consultative period of 90
days started. We have just had a meeting today with them, a sensible,
useful and constructive meeting, as to how now, in the light of
the discussions that we have had and with the clarification of
points, the discussions can start to take place at local level
to get an even greater understanding of what is proposed; to hear
if there are any suggestions to try to ameliorate the problem,
which in business terms makes sense, and we are open to listen
to them, as that is what consultation is all about. Then in the
light of that to meet in about a month's time to see what the
outcome of the situation is. That is exactly where we are as of
just now as far as the trade unions are concerned. As far as the
Government is concerned, the Prime Minister and, indeed, the Secretary
of State for Trade and Industry, we have explained to them again
what the problems we face are, and I am happy to talk to the Committee
about that, what the reasoning behind the proposed closures and
job reductions are. At the time we were not in a position to talk
about the detail, although we were able to outline the sorts of
regions that were likely to be affected, because we had not finished
working out the plans. As soon as we had we wanted first to talk
to the workforce about them because consultation, unlike what
has been said in the press, has taken place over a considerable
time with Government, and by that I mean years, in terms of the
worsening climate as far as industry is concerned, and indeed
in the plants, particularly in the plants affected. It was not
news in terms of the trade scene. The unfortunate thing for those
directly affected with job reductions was it confirmed their worst
fears because the consultative process is built within the fabric
of the company wherever we are, wherever we operate, and it has
been over many, many years.
115. I am not very sure if you and I have the
same definition of the word "consult". Maybe we could
get clear what you mean by it. Has there been any material change
as a consequence of the first 14 days of discussions since your
announcement?
(Sir Brian Moffat) No, but that was never the intention
of the first 14 days. The first 14 days was to give the unions
time to consider and decide how best to approach the consultative
period. How to tackle it. They have now decided how they wish
to do that, which is to allocate to the various plants involved
and to take the discussions in detail with the local management,
and we have agreed to that. In the light of those discussions
to then bring them back to national level and to talk with myself
and colleagues, Mr Johnston in particular, about the way forward
as well as—because there is an inevitability for some jobs
out of that—how we develop training or retraining schemes
and deal with people who unfortunately will be redundant.
116. I am sorry but are you suggesting that
there may well be fewer people made redundant as a result of what
will now be set in train at the local level following from your
announcement?
(Sir Brian Moffat) We are not suggesting that but
we are open to look at any suggestion, constructive suggestion,
to try to overcome, if we can, the business scene that we are
faced with. We are not saying this is game, set and match, we
are saying we will talk in detail, because we have not yet talked
in detail about the particular proposals and over the period of
time in front of us, several months in front of us, we will talk
about that and listen to any constructive suggestions that anybody
wishes to make in terms of our trade union consultative process.
117. You have said already that you had been
having discussions of this character prior to the announcement
last week.
(Sir Brian Moffat) We have got Works Councils at all
the works, indeed we have got a European Works Council as well,
and our employees were fully aware of the difficulties we faced
in the UK both at the corporate level through, for example, the
European Works Council, and through the individual within the
Works Councils so far as it affected the particular businesses.
118. You have in the past, for example, I understand,
had an offer from the unions to buy Llanwern, is that correct?
(Sir Brian Moffat) There was a proposal from one of
the unions, from the ISTC, that they wished to consider the thought
of buying Llanwern before Llanwern had actually been identified
as a possible closure situation by us. In the event they have
never taken that further.
119. Is it not the case that on 29 February
you sent a letter to the ISTC stating "I do not think it
appropriate to meet to discuss a possible acquisition of Llanwern
by you"?
(Sir Brian Moffat) At that time, yes. At that stage
we had not finished the work to specify that Llanwern was a closure
candidate. The question of Llanwern as we now know it, and indeed
the whole subject, is a question of market size in the UK and
the fact that the market is not growing, the market is declining,
particularly in flat products. It is not a question of maintaining
capacity, we have far too much capacity in the UK for the market.
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