The process and consequences of industrial restructuring and plant closure: A case study from the UK steel industry Ian Greenwood Submitted in accordancewith the requirements for the degree of PhD The University of Leeds Leeds University Business School January2009 The candidateconfirms that the work submittedis his/herown andthat appropriate credit hasbeen given where referencehas been made to the work of others.This copy hasbeen supplied on the understandingthat it is copyright material andthat no quotationfrom the thesismay be publishedwithout proper acknowledgement. `It was like standing on an empty stage; the actors had gone and there was nothing to show who they were or what the play hadbeen about' Barker (1998) Visiting Ebbw Vale today and looking out over the site of the former steel works, it takes no little imagination to visualise 200 years of industrial history. This research, although ultimately about the social processes of industrial restructuring and redundancy at a general level, has used the case of Ebbw Vale as a specific analytical vehicle. It is therefore dedicated to the steelworkers - at all levels - of Ebbw Vale, their families, community and particularly those individuals whom I now count as friends. It is axiomatic to declare that life moves on. Nevertheless, such post hoc rejoinders can appear glib and unsympathetic to the participants in, who are often the victims of, industrial change. Ebbw Vale without a steel industry is unimaginable. Although regeneration is taking place and the life of the community will revive, it is no bad thing to occasionally take time out to wonder at the social costs of late Capitalism and whether its dramatic impact might be differently enacted. Acknowledgments I would like to thank my colleagues in the Work and Employment Relations Division of LUBS. To be part of such a vibrant, research focused and collegiate community is stimulating indeed. Special gratitude goes to a number of individuals who have made this thesis possible. These are Neil Cramp, Steve Tolliday, Miguel Martinez-Lucio and Peter Nolan but especially so my supervisor Mark Stuart. Mark's support for the goal of a PhD and collaborative spirit have been instrumental to the outcome of this study. This work is dedicated to two groups of people. My long suffering family in particularly Nora and Norah, without whom I wouldn't have been possible and of courseEileen (and Caitlin, Alex andHugh), without whom this thesis(and a whole lot more)would not havebeen possible. The other group of people to whom I dedicatethis work are all those individuals who gave freely of their time to participate in this study. These include many managers and employeesacross Corus and ASW and especiallythe steel workers of Ebbw Vale (somenow good friends especiallyJeff Morgan and Dai Davies), their families, their communityand the achievementof `PeoplesVoice'. Finally, the thesis is dedicatedto the memoryof Vernon Lewis. Abstract The central objective of the thesis has been to present an account of the industrial relations of industrial restructuring and plant closure. Whilst there are many portrayals of the circumstances of plant closure and particularly the implications for victims and survivors, academic interest has rarely focused on the whole process. Hence a key consideration has been the exploration of the full life cycle of plant closure: the complex dynamics of the processesof industrial restructuring, framed by historical, geographical and political contexts and the social and industrial relations processes therein. Included here is the attempt by one trade union to develop a post closure strategy of community unionism. The context for the study is that of the UK steel industry and specifically the Corus restructuring exercise that took place in 2001 and 2002. The research strategy took the form of a qualitative, embedded case study. Hence although the closure of the Ebbw Vale steelworks was the focus for detailed investigation, the research encompassed the wider corporate organisation and also the community of Ebbw Vale. The findings show that the crisis that engulfed Corus in 2001 was the result of the combination of historical, financial and political factors. The ability of the organisationto respond to crisis was almost fatally damagedby the power of the banks and tensions between Dutch and UK management.At national level, unions were also divided by internal divisions. At this level, there was no rapprochement betweenthe representativesof labour and capital. Once,however, the requirementsof restructuring moved to plant level and the reality of closing a site over a protracted period of time, the financial and human crisis of restructuring produceda different dynamic. There was a shift in the balanceof power towards labour and constructive engagementbetween unions and managementoccurred. The findings also show that an organic link with industry and community might be a necessarybut not sufficient condition for the successof attemptsby unions to retain membershipand influence post plant closure. In conclusion,the findings demonstratehow industrial restructuringand plant closure are subject to different and distinct phasesof negotiation shapedby wider political, managerial and union strategies. The interplay of different forms of employee participation, the ebb and flow of power relations and the balancebetween conflict and cooperation are the key dynamics highlighted in this thesis. Contents Page Introduction xiii-xv Chapter 1: The Ebbw Vale Steel Works: History, Industrial Relations and Belonging 1.0 Introduction 1 1.1 The Ebbw Vale Steel Works: History and Decline 1 1.1.1 The Final Years 3 1.2 Community, Politics and Steel 5 1.2.1 Steelworkers and the Labour Party 7 1.3 Occupation,Identity and Memory 9 1.3.1 Occupational Communities and Trade Unionism 15 1.4 Industrial Relations in the UK Steel Industry 16 1.5 Bargaining at Ebbw Vale prior to closure 20 1.6 Participation and Industrial Relations at the Ebbw Vale Works 22 1.6.1 Teamworking 22 1.6.2 Initiatives for Involvement 25 1.7 Conclusion 26 Chapter 2: Restructuring, Plant Closure and Industrial Relations: A Review of Issues 2.0 Introduction 28 2.1 CorporateRestructuring and Plant Closure 30 2.2 Participationand Involvement 36 vi 2.2.1 Participation: Cycles or Waves? 43 2.3 The role of Management in Restructuring 46 2.4 Restructuring and Union Dynamics 48 2.5 Geography, Industrial Relations and Restructuring 52 2.6 Community Unionism 54 2.7 Occupation, Identity, Community 57 2.8 Conclusion 59 Chapter 3: Research Methodology 3.0 Introduction 62 3.1 Researchobjectives and questions,design and strategy 62 3.2 MethodologicalConsiderations 63 3.2.1 CaseStudy Research 63 3.2.2 Ontology and Epistemology 65 3.3 Analysis of Data 66 3.3.1 Oral History 67 3.4 Backgroundto the study 69 3.5 Research Data 71 3.5.1 The Interview Process 71 _ 3.5.2 Sampling 73 3.5.3 Documentarymaterial 74 3.6 Credibility of findings 74 3.7 Limitations of the study 77 3.8 Ethical considerations 78 3.9 Conclusion 79 vii Chapter 4: The Corporate Restructuring of Corus and the Politics of Participation 4.0 Introduction 80 4.1 The international steel industry: context and restructuring 80 4.1.1 The UK steelindustry 81 4.1.2 The UK steel industry: contemporary developments 82 4.2 Restructuringof Corus andthe dynamicsof corporatestrategy 84 4.2.1 Chronologyof the Corusrestructuring 87 4.2.2 Restructuringand plant closure:The Corusanalysis 89 4.2.3 Government financial aid 93 4.2.4 Corus Tinplate: strategic plan 94 4.2.5 Ebbw Vale: economicsof closure 95 4.2.6 Ebbw Vale: arithmeticof closure 98 4.3 Corusand the politics of restructuring 100 4.3.1 Political fallout 102 4.4 The Restructuring of Corus and the process of 104 stakeholderparticipation 4.4.1 Informationand Consultation:government perspective 107 4.4.2 Corusand trade union relations 111 4.4.3 Union strategyand internaltensions 114 4.4.4 Trade unions and restructuring through Partnership 116 4.4.5 Restructuringand Industrial Strategy 119 4.5 Discussion 121 4.6 Conclusion 123 Chapter 5: The closure of the Ebbw Vale steelworks: Industrial Relations and the Management of Closure 5.0 Introduction 126 5.1 The Survival Plan: Redundanciesin 2000 - 126 Option `A' and Option `B' 5.2 The Closure of the Ebbw Vale Works 128 5.2.1 The Closure Announcement 128 5.2.2 The closureannouncement and managementstrategy 131 5.2.3 Management strategy for communication and participation 133 5.2.4 Local union strategytowards closure 135 5.3 The Ebbw Vale union alternative local plan, context 136 5.3.1 The Ebbw Vale alternativeplan in detail 138 5.3.2 The Alternative Plan and its final rejection 141 5.4 Agreeing closure 145 5.5 Collective Bargaining: The issues for closure 152 5.5.1 Additional Payments 155 5.6 Presentationof the ClosureAgreement to employees 159 5.7 The run down period - April 2001 to July 2002 161 5.7.1 Crossmatching 163 5.7.2 Training support for employees 164 5.7.3 Pensionsand thoseunder 50 `life planners' 167 5.8 Final closure:Statistics and Commemoration 168 5.9 Conclusion 171 IX Chapter 6: Partnership, Learning and Employability: Communitas (SPT) 6.0 Introduction 175 6.1 Communitas: Origins structure and function 175 6.1.1 The operation of Communitas 179 6.2 Communitas and redundancies at Ebbw Vale: The notice period 180 6.3 Communitas, Agencies and Partnership 182 6.3.1 Problems in receiving support 185 6.4 Communitas: Training and advice post redundancy 188 6.4.1 The coordinating role of Communitas 189 6.5 Preparation of workers for the Labour