Examination of Witnesses (Questions 200
- 219)
WEDNESDAY 2 MAY 2001
SIR BRIAN
MOFFAT, MR
TONY PEDDER
AND MR
DAVID JACKSON
200. What you are saying is that the DTI were
in fact on notice from June of last year that from your perception
at least your company was in some difficulty. Is that right?
(Sir Brian Moffat) Yes. DTI had been on notice of
that for a long time, prior to that too. I myself had been to
see Ministers before Mr Byers was appointed about the deteriorating
situation and indeed I asked Mr Jackson to look that up, given
that I know there was concern about lack of consultation on this
particular point. In the last two years we have met with Members
of Parliament, with Ministers, at all levels and in all areas
145 times talking about the situation, the deteriorating situation
in the industry.
Mr Caton
201. You have talked to people 145 times. You
also said in your introductory remarks that you talked in all
localities affected by the 1 February proposals. Have you been
to every one of the plants yourself and talked to the workers
you are sacking?
(Sir Brian Moffat) I have not been to every one of
the plants; I have been to plants.
202. Have you talked to the workers you are
sacking?
(Sir Brian Moffat) I have not directly talked to the
workers I am sacking and I am not directly sacking them. I am
responsible though and recognise that. It was agreed that one
member, the man who is in charge of the business at the most senior
level—not the managing directors but the man to whom those
managing directors are responsible—would talk to the workforce
and to the union officers at local level, lay officials or full-time
officials. That was agreed nationally with the union officers
and Mr Pedder did that very, very deliberately and very methodically
and I would say also very sympathetically.
Mr Edwards
203. Have you been to all the plants in Wales?
(Sir Brian Moffat) Yes, I have been to the two main
plants in Wales since we talked.
204. Have you been to Bryngwyn?
(Sir Brian Moffat) I have not; I said the two main
plants. I have been to Port Talbot and Llanwern.
205. Bryngwyn is one of the main ones inasmuch
as you are closing it; it is one of the main ones in this discussion.
(Sir Brian Moffat) I repeat that I have been to the
two main plants in Wales, I have not been to Bryngwyn, nor have
I been to Shotton, nor have I been to Ebbw Vale, but I have been
to Port Talbot and Llanwern.
206. Do you not think it would have been good
for pure PR reasons to have gone to some of these to avoid awkward
questions like this.
(Sir Brian Moffat) If I could have gone to more plants
I would have done so. I have other responsibilities too.
207. Where is your base?
(Sir Brian Moffat) My base is here in London.
Mr Caton
208. So your understanding, that people now
understand the circumstances better, comes third hand really.
It does not come from your direct experience.
(Sir Brian Moffat) No. One thing I omitted to say
is that we have had two meetings of the European Works Council
since we met. We had our normal six-monthly meeting prior to that,
three weeks earlier, and about a fortnight after we met here in
the Committee. We had a special meeting to talk about the reconstruction
of the industry in the UK, the implications and so forth. I had
the opportunity there not only of chairing the meeting but talking
over a period of time and then subsequently in the regular meeting
with all the lay officials represented from the various works—it
is a big body—as well as the full-time officers. I have
had the opportunity of talking to people affected but not in terms
of mass meetings.
Mr Paterson
209. Of the 145 meetings with Government, when
was the first meeting?
(Sir Brian Moffat) I am sorry I cannot tell you. We
have a diary of events. I regularly meet Secretaries of State
for Trade and Industry through the year, sometimes at their calling
when they ask to see me about subjects which they talk about with
industry leaders, equally at times when I have cause to go to
talk to them about my concerns about the situation. I am on record
over the years quite clearly as having talked to them about it.
I can give you a diary of events.
210. Can you give us the diary?
(Sir Brian Moffat) I am sure I can.[1]
(Mr Jackson) We can certainly go back
and put in the key dates.
211. Can any of you remember when you first
met the Secretary of State for the DTI on this matter?
(Sir Brian Moffat) Very shortly after his appointment
and I met Mr Mandelson just before, but I cannot tell you the
exact date.
212. So you have met his predecessor on this
subject.
(Sir Brian Moffat) Yes.
Mr Smith
213. On the question of consultation, in our
last evidence-taking session Mr Leahy of the ISTC told us on this
particular decision about redundancies that the consultation process
with the company was, to use his words, "non-existent".
You said shortly afterwards that you had consulted on a regular
basis with the unions. How do you explain the difference?
(Sir Brian Moffat) I cannot explain Mr Leahy's view
because I do not agree with it. We have at all our works, and
have had I would say for the best part of 30 years and in some
works much longer than that, consultative committees, sometimes
variously known, but we would largely call them Works Councils.
I think you would do the same. Some of them are much older than
that and indeed the original Whitley Council emanated from our
Orb works in the teens of the last century and still goes under
that name. Most of them meet at least monthly, sometimes more
than that. All talk about the business situation. All talk about
items of interest varying from the business scene, the market
scene, the results so far as they can be explained given that
they are privileged information, the impact on operations of certain
aspects, sometimes within control of the people concerned, sometimes
outside. They are discussed as well as regular items such as health
and safety, the environment and so forth. They have joint secretaries,
the agendas are never in argument at all; people can bring forward
what they wish to and as long as it is relevant and the trade
unions are as anxious as the management to ensure that things
are relevant. It is not a negotiating procedure, it is a consultative
procedure, that happens throughout the company and is ingrained
in our procedures which indeed happens in Holland as well and
other parts of the company, Germany, Sweden, you name it, the
US. It is a common accepted culture as part of our communication
outlet.
214. But that is local level, plant level communication.
So Mr Leahy could have been right in saying there was not consultation.
(Sir Brian Moffat) At national level twice a year
as a minimum we see all national officers in the sense that they
are all invited to talk about the results each time results are
produced and last year it would be more than twice because of
an extended 15-month period. They are taken through the results
by the senior team, ask questions, are given explanations, given
copies of the slides, talk about my statement where relevant and
indeed prior to my becoming Chairman, when I was Chief Executive,
and this was of my own volition, I used to go and see the Executive
Committee of the ISTC every year outside normal business so that
they could talk to me, I could explain the business scene, they
could ask the questions off the record and ensure that they were
properly informed. Equally, if they had concerns or problems,
I could be better informed directly by them.
215. How do the statutory requirements to consult
with your workforce vary between Wales and the Netherlands?
(Sir Brian Moffat) They are not significantly different,
but they are different in some respects. I just talked about Works
Councils but the Works Council in Holland is a legally constituted
body, whereas here it is not, but we have them and most responsible
companies have them as well. They may not always be called Works
Councils. In Holland they have Works Councils and for certain
aspects in Holland you have to take advice from them about circumstances.
That could be closure and you could have a four-week laying in
period or even up to an eight-week laying in period depending
on the advice. They call it advice but I would say opinion is
probably a better word. If you get a negative opinion it is eight
weeks lying in before anything can be acted upon. If you get a
positive one it is up to four weeks. Both are below our statutory
minimum of 90 days but there is a difference and that is how best
I can explain it.
216. How do you explain the public backlash
to your company's decision in announcing these redundancies to,
say, Motorola with their quite devastating decision the other
week? Why does it seem so much worse for Corus in your opinion?
(Sir Brian Moffat) In my view it is that steel still,
wherever you are in the world, is a far more politically oriented
situation than many other businesses, not necessarily coal though.
Coal and steel are very traditional, are in traditional areas.
Industry has been built on them in the successful industrialised
nations and people are very aware of that. They tend still to
be in the industrial heartlands of the countries concerned and
we ourselves are the same. As you know, unfortunately in Wales
we are one of the biggest employers. With the reductions which
have taken place in the coal and steel industries over the year,
understandably where steel still dominates towns it has to be
a major critical issue.
217. But not the handling of the issue. How
long do you expect to remain in your job?
(Sir Brian Moffat) As Chief Executive as against Chairman?
I am only acting Chief Executive and I would hope we get a new
Chief Executive during the course of this year.
Mr Caton
218. You will probably remember when we last
met that we got into a discussion about the timescale for the
decision being made. You said at that time that you had been looking
at different options intensively over that period since 5 December
right the way through. You personally had been heavily involved
with it. I asked you whether you had shared those options and
the information which goes with them with the trade unions and
you said no. Have you taken the opportunity during the 90-day
consultation period to make the trade unions aware of the various
options you took into consideration in coming to your decision?
(Sir Brian Moffat) We have outlined the types of options
that we looked at, but basically we determined that we could not
look at options on a plant by plant basis. We tried to do that.
We had had to look at it from a market situation, given the long-term
erosion of the market and the market developments which were taking
place largely in our home market in mainland Europe in the last
few years. It was inevitable we had to look at the systems effect
back into the business and then how that impacted across the plants.
We have done our best to explain that.
219. Did you, after 1 March when we last met,
provide the trade unions, the collective representatives of your
workers with additional significant information on the options?
(Sir Brian Moffat) Significant additional information
on their ideas and our ideas and where clashes were but not on
significantly different information on the options which you talk
about. I was saying that our options were very limited by the
marketplace. It was not a question of choosing plant A as against
plant B.
1 See page 54. Back
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