Whatever happened to good old partnership?

As the Anglo-Dutch steelmaker Corus stands on the brink of bankruptcy or
break-up, it is a cruel reminder of the corporate mess that occurs when senior
executives fail to get a grip.

Cumulative losses in the past four years at Corus now stand at around £2bn,
and there is no doubt that its plight goes far beyond the current feud between
the UK management and the Dutch supervisory board.

These are extraordinary times for business. Uncertainty over world trade has
led to a crisis in European manufacturing. With domestic demand falling and the
rising strength of the euro, Corus has had few opportunities for growth. The
business was already in severe crisis, yet it did itself no further favours
last week with the mishandling of its job losses announcement (see this page).

The CEO Tony Pedder and chairman Sir Brian Moffat were so distracted by
court wrangling in Amsterdam that their risk management at home went out of the
window. The media picked up the story and had a field day. There was no
forewarning, no effort to consult with anyone, not even the Government. The
needs of the workforce, investors and customers were utterly ignored.

The credibility of the business is now in jeopardy and thousands of jobs
will go, probably with the Teeside unit bearing the brunt. Rather ironically,
Teeside was once described by Tony Blair as "one of the most productive
plants in the world".

You have to ask how involved or informed were the HR directors and corporate
communications chiefs at Corus? The business may be in peril, but there are key
stakeholders to consider too. All the evidence suggests HR and communication
issues were not even on the board’s radar screen.

Damage limitation never came easy to Corus, and it has clearly not learned
the lessons from past mistakes. Two years ago, the company was publicly exposed
– there was no warning, no consultation, no partnership – it simply presented a
fait accompli when 6,500 redundancies were announced. The unions, as now, were
highly justified in their heavy criticism of the management team.

Corus won’t be the last business to face a meltdown and then disastrously
manage the fallout in terms of consequences for its people. HR professionals
should view the Corus debacle as an exercise from which they can learn a great

By Jane King, editor of Personnel Today

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