Corus hits back over media circus surrounding job cuts

Q&A After fierce words from the unions, Corus puts the case for staff
consultation and outlines how it will tackle its problems in the UK, by Quentin

Steel giant Corus hit the headlines earlier this month as it announced
losses of £458m for 2002 and the need to reduce capacity.

The chief executive of the crisis-hit company Tony Pedder resigned last
week, and speculation is mounting about the possible break-up of the
Anglo-Dutch steelmaker. Unions are predicting swingeing job cuts to its 26,000 workforce
in the UK.

Executive director Allan Johnston – in charge of HR – talks exclusively to
Personnel Today about the challenges facing the beleaguered company and his HR

Q How many jobs are to be cut, and where?

A We haven’t actually made any announcements, other than the fact
that we are doing an analysis of the UK manufacturing base. We haven’t made any
decisions about the number or the location of the job losses. We have said that
we need to review our UK manufacturing. I met with all the steel unions and
told them they will have full consultation about what may or may not be about
to happen. Which is completely different to what we did in 2001, when we made
an announcement about 6,500 job losses.

Q There has been a lot of speculation about losses, how does this make
your job as an HR director difficult?

A It’s extremely difficult when you get stuff like this [media
coverage]. We are, because of what’s been happening to the company, consulting
locally, nationally and internationally. We just sent out cascade packs to tell
employees what is actually going on. We have got a period within which to
consult, but we cannot release any final decisions until we conclude our
discussions with the banks over the refinancing of the company, and that could
be weeks or months.

Q How will you announce losses, if they are to happen?

A We will need to tell those affected first. That might prove to be
the secret because, as always, people will speculate. What we really don’t want
to happen is what happened in 2001. People did speculate, and did hear about
the losses on the radio, and we were, absolutely correctly, criticised for

Q How is the preliminary information being cascaded?

A The information has been given to all the heads of business, to use
as they see fit. Some will have shift-by-shift meetings, some will have big
meetings, some will do it by department.

It’s happening right now, and on all the big sites it has already happened.

The information doesn’t contain anything about the new structure and it
doesn’t contain anything about numbers.

Q Are you confident you will be able to inform employees appropriately?

A Yes. We will be communicating with the people affected, via
internal communications, intranet, and line managers.

Q So will Corus be ready when the Information and Consultation Directive
comes into force in 2005?

A Yes we will. We are already doing it. The only dilemma will be, do
we stick with our current communication arrangement in the localities – we have
well over 100 sites in the UK – or do we look at something else? We will
discuss this with the unions.

Q Is the HR function ‘piggy in the middle’ – having to balance pressure
from the board and the unions?

A No. I don’t subscribe to that view. That’s not our role at all. Our
role is the professional management of people to make the business better.
That’s what we try to do, and I think we do that successfully. If we look at
the national statistics for productivity, UK steel workers have a very high
productivity level. Ten years ago employment costs were 33 per cent of
turnover. Now they are 19 per cent. And in terms of working practices, in the
past 20 years we have made leaps and bounds.

Q How difficult is it dealing with layoffs?

A We have been, for quite some time, in shrinking mode, and there
have been a lot of job reductions. We tend to be able to manage them
successfully, jointly with the trade unions. We had a little bump in February
2001, but once we got that behind us, there wasn’t one minute of stoppage time
anywhere or disturbances in manufacturing. We do an annual attitude survey in
the UK and 85 per cent of workers say Corus is a good or very good employer. We
have a very good track record of dealing with people because we have had
expertise of dealing with how to downsize and make it as socially acceptable as
possible. The trade unionists don’t like it, and I would prefer to be part of a
growing industry. The key thing is we are consulting, we will continue to
consult and we will have plenty of time to deal with any shrinkage.

Q What lessons have you learned from the mistakes of 2001?

A You have to trust people, you have to make sure that whoever is
part of the consultative process maintains confidentiality, and generally speaking
that means you have to make sure the process is done with people who can be

And you have to try to ensure that it is not hugely extensive in terms of
numbers of people – it is quite easy to be confidential when there are half a
dozen people involved, but not when there are a hundred.

Q Is confidentiality achievable this time?

A Yes.

Corus goes through the mill

October 1999 – Corus is formed through the merger of British
Steel and Netherlands-based Koninklijke Hoogovens

February 2001 – reduces capacity and announces 6,050
redundancies. Some of the employees first hear of the redundancies through the

March 2003 – announces huge losses and admits it will have to
reduce capacity further. Speculation about demerger

Last week – Corus chief executive Tony Pedder resigns, and
unions call for the resignation of chairman Brian Moffat

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