Examination of Witnesses (Questions 120
THURSDAY 1 MARCH 2001
120. The figures we have been given today are
that it takes 100 minutes to produce one tonne of steel in the
United Kingdom and 120 minutes in the Netherlands. Are you aware
of these figures?
(Sir Brian Moffat) I am not aware in terms of minutes
but in round terms it is in both areas about two man hours per
tonne of hot metal produced on the product range, like for like.
There is little to choose between them. It is not a question of
productivity; it is a question of cost.
121. Are you saying that these figures we have
been given are incorrect?
(Sir Brian Moffat) I am not saying they are incorrect;
I am just saying that people in Wales, be it at Llanwern or Port
Talbot, on a like product range, are in the top league in Europe
on productivity and I have never complained about productivity
in terms of the restructuring situation. I am on record as doing
122. In fact, the information we have heard
today confirms that. There has been a ten per cent year on year
improvement in productivity which is three times the national
average for the manufacturing sector.
(Sir Brian Moffat) And that is the problem. You have
just put your finger on it. We have grown so fast because of productivity
and efficiency that the rest of the market has not grown with
us and as a result we have had to export more and more of our
123. Exporting or for the domestic market, your
workers have done the whole market proud.
(Sir Brian Moffat) Yes, they have.
124. They have increased their productivity
and increased profitability and you turn round and say to them,
"Your reward is that we are going to sack you". Are
you selling Welsh workers down the river?
(Sir Brian Moffat) We have hung on as long as we could.
I have been part of the South Wales scene for many years and indeed,
as far as Port Talbot and Llanwern are concerned, actually helped
the productivity situation in the 1980s dramatically to improve,
which it did, and for 20 years they have been very successful.
Unfortunately, the rest of the market has not grown with it despite
exhortations from me and other business people to help create
an investment climate in this country so that manufacturing industry
can continue to grow and not diminish and be exported off these
shores. That economic climate was not created and the situation
we have got today unfortunately is such that we are going to have
to downsize and try and create out of the situation for the 20,000-odd
people that are left in our business a scene in which, with Government,
we can help recreate manufacturing in this country and try and
build, go forward, and arrest the decline in manufacturing industry.
That is the problem we have got.
125. Can I ask you one final question? What
message have you got for the families, the wives and children,
of those 3,000 workers that you are going to sack in Wales?
(Sir Brian Moffat) That we will do our best to work
with Government to try and retrain people, as we have in other
areas very successfully, to create new jobs, new inward investment
and help facilitate that. We have a track record of doing that.
If we could get people to meet us to talk about retraining programmes
and get the thing off the ground we would be doing that already.
126. What people to meet you?
(Sir Brian Moffat) Government and unions.
127. Are you saying the Government has not wanted
to meet you?
(Sir Brian Moffat) We had a meeting fixed last Friday
with the Government and the unions on a tripartite basis and the
meeting was cancelled the day before and we have not been able
to fix another meeting.
128. Is it not rather disingenuous, Sir Brian,
for you to be saying this just now? By all accounts the problem
is that you and your management have not been available to speak
to people over the past few months. Are you now saying that the
unions were not prepared to discuss these matters with you?
(Sir Brian Moffat) I am not saying that. I am saying
we had a meeting. I do not know by whom but the meeting was cancelled
last Thursday afternoon and the meeting was meant to be held last
129. Can I refer to the Corus plant in my own
constituency of the Bryngwyn colour coating works? If you go ahead
you will be ending more than 120 years of steel industry involvement
in Gorseinon. The workers at Bryngwyn do believe that they are
being sacrificed unfairly and irrationally. They point to seven
years of full order books, profitability, highest quality levels,
best yields, highest maintenance of line availability, superb
customer satisfaction, and they ask why are you doing this? Only
last April you were commending Bryngwyn's workforce as an example
to the group. Nine months later you are telling them you have
no use for them. Can you understand how they feel?
(Sir Brian Moffat) I can understand how they feel,
how disappointed they are. Equally, like all our workers, over
time they have been told about the situation, the deterioration
in the trading scene, and the concerns we have unless we can arrest
it. And what has had to happen is that we have had to take out
the higher cost plants among the group and take out the lowest,
poorest form of business, and unfortunately Bryngwyn and others
have been affected as a result of that.
130. But Bryngwyn has been making a profit,
has it not?
(Sir Brian Moffat) Bryngwyn I am not aware has been
making a profit.
131. Is it true that the laminator process on
number one line at Bryngwyn is going to Hoogovens in Myriad France?
(Sir Brian Moffat) No, it is not true.
132. What is happening to it then?
(Sir Brian Moffat) The number one line is the oldest
line we have got for colour coat. It is over 30 years old. I would
doubt it was going anywhere.
133. Sir Brian, you seem to know about the plant
but you do not know if it is making a profit. I think it is astonishing.
(Sir Brian Moffat) I know about the plant. I built
one of the lines there.
134. Well, good on you. Why do you not know
whether it is making a profit now? You are the Chairman.
(Sir Brian Moffat) I can tell you about the business.
I can tell you they are the lowest tranche of business. This is
not the way we have done it. You people choose not to listen.
The lowest tranche of business is not making any money. The highest
cost producer of the product range is Bryngwyn. We load the lower
cost plants and the higher cost plants with the highest cost business
and the biggest losses have to be sacrificed.
135. Who are you accusing of not listening to
you, Sir Brian? We know that the unions want consultation with
you and we are being told by them that you have not consulted
with them in any meaningful way, so who is not listening?
(Sir Brian Moffat) I have consulted with them and
colleagues have consulted with them on a regular basis.
136. Is that after or before you made the decision?
I thought consultation was before you made decisions?
(Sir Brian Moffat) I talked to the unions before Christmas
with one of my colleagues. To the national union officers in our
offices about the situation and the work we were doing to try
to identify the rationalisation which would take place, and promised
as soon as we had completed that work we would start to talk with
them, but we had to complete the work first. I explained the background
to the situation which had given rise to having to do the work
and we started and spoke with them within 24 hours of finishing
the work, and indeed stopped the clock in terms of formal consultation
and agreed with them that for 14 days they should go away and
talk and if they wanted to come back and talk with us in the meantime
we were available to do so, and they did that.
137. After you had made the decision to close?
(Sir Brian Moffat) After we had made the decisions
about the closure.
138. How did the Llanwern closure story start
appearing in the financial press within days after the departure
of John Bryant and his Dutch counterpart?
(Sir Brian Moffat) I do not know. It was not the management.
139. Was Corus directly or indirectly responsible
for the impression gained that Llanwern was going to close?
(Sir Brian Moffat) No, not as far as I am aware.
6 See page 36. Back