Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 200 - 219)



  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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