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By Paul Blyton
This sustained productivity increase reflects the combined effect of several factors. The large- scale restructuring which took place in the late 1970s and 1980s brought about the closure of a number of smaller and less efficient steelmaking operations, as well as a very large reduction in total manpower employed. At the same time, selective large-scale investment resulted in more production taking place using large-scale equipment located at the more modern and efficient sites. Since the mid-1980s, continued productivity gains have been secured partly by continued closures and manpower reductions (such as the closure of the Ravenscraig integrated site in 1992), but also as a result of significant changes in work organization (see above).
One barrier to further major increases in productivity lies in the continued operation of four integrated plants. In the longer term, it is possible that one or even two of these plants will cease to be involved in steelmaking, and operate solely as finishing mills. If this were the case, steelmaking would probably be terminated at Scunthorpe and possibly Llanwern, with steelmaking activities being concentrated at Teesside in the north of England and Port Talbot in South Wales. Both of these sites have deep water port facilities, facilitating further increases in their scale of operations. However, it is not anticipated that any change to the making of steel at the four integrated sites will take place in the short term.
Many of the quality improvements have been user driven or have developed in close collaboration with steel purchasers. Automotive firms are a good example of this. The demand for thinner and lighter steels has combined with a demand for better rust resistance. As well as changes in technology and closer collaboration with suppliers, quality levels have also been the subject of changing work practices and industrial relations. On the former, the greater use of statistical process control has already been noted. Also significant has been the greater attention paid to communicating the importance of quality to the workforce -- an aspect of change which is part of the company's emphasis on total quality management, or Total Quality Production as it is termed within British Steel. As regards the link between quality and industrial relations, quality has figured as a target element within local Lump Sum Bonus negotiations (see above), in which bonuses are linked to the number of rejects or customer complaints regarding the steel production.
One future direction which should give rise to a further increase in product quality is the development of new and higher quality products. British Steel has developed a number of new products in recent years, particular in the area of coated steel. The increased emphasis on higher value-added products, such as coated steel, coupled with the increased automation of process controls is likely to mean that the overall level of steel output continues to rise in quality in coming years.
One of the main environmental issues within the company remains that of the former integrated site at Ravenscraig in Scotland, closed by BS in 1992. The future use of this site has not yet been determined, and various environmental issues relating to the site are still to be resolved.
Among other initiatives, British Steel is co-operating with various parts of the packaging chain as part of the efforts to meet packaging waste recovery and recycling targets as required by the European Directive (BS Annual Report, 1996: 19). The company is also active regarding environmental projects such as at its Llanwern and Teesside sites where areas of water have been developed as wildlife sanctuaries.
Among the implications of these technological developments for the workforce are first, the heightened need for training in the use of new processes, many of which require greater competence at monitoring automatic process control equipment and familiarity with computers. Second, is the number employed in R&D activities in the areas of both process and product development. Yet, at the same time, as the company directs a substantial amount of its current new investment into its North American iron and steel activities, it is possible that a number of the major technical advances in the coming period will occur outside rather than within the UK.
The government's current role vis-à-vis the privatized BS is significantly less, though it retains a broader influence through its impact on, for example, exchange rates, the level of activity in the UK economy and its corporate taxation policies. More specifically, BS and the UK Government are actively concerned with the issue of state aid by foreign governments to other steel companies (such as the aid granted to certain steel producers and authorised by the EU Council of Ministers in 1993, followed by the further granting of state aid to Irish Steel Ltd. in 1995) and the effects this may have on competition within international steel markets.
In the past, much steel work was physically demanding. However, the automation of many processes has eliminated much of the heavy work, making most steel jobs more accessible to women than has commonly been seen to be the case in the past. Companies such as British Steel have a small minority of women working on the shop-floor (for example, as engineers); however, steel companies generally are now in a position to adopt much more pro-active equal opportunities recruitment initiatives to increase the proportion of applications for shop-floor positions from women.
As management's search for improved performance continues, increased emphasis is placed on workers meeting higher quality targets and working flexibly within their areas to maximize the degree of labour utilization in order to avoid unnecessary labour costs. However, these managerial demands for higher quality, commitment and flexibility are often being sought against a background of continued job insecurity in the industry. One attitude survey of over 450 workers at a large BS finishing plant, for example, found 60% dissatisfied with their level of job security (Blyton, et al., 1996: 162). In the long term, management may be best able to secure increased commitment and flexibility by linking its demands to guarantees, for example, to making no compulsory redundancies within an agreed period. The introduction of such exchanges may extend the kind of reciprocity that has been identified as important within Japanese organizations, where lifetime employment guarantees have been associated with a higher level of worker co-operation and flexibility (Dore, 1986).
There is an important role for trade unions to play in ensuring that the future development of the steel industry takes place in conjunction with adequately protected conditions for their members. A key role for trade unions in the future could lie in the area of health and safety provision. A danger of pursuing maximum performance is that health and safety standards are relaxed; effective health and safety monitoring by trade unions could obviate this. Further, it will be important for trade unions to seek to extend their coverage among subcontractors, which appear frequently to operate with a lower health and safety awareness compared to directly employed workers. In 1995/96, for example, British Steel suffered three fatal injuries among its subcontracted workers. This underlines the need to ensure that a generally improving accident rate in the industry generally is also reflected among contractors' employees through a more careful attention to health and safety provision.
The UK steel workforce of the twenty-first century is likely to be significantly smaller than it was even a decade ago. At the same time, it will be a more highly skilled and highly trained workforce, expected to perform a wider range of tasks to a higher degree of specification. The making of steel, and the steel works in which this takes place, have undergone considerable alteration over the past generation. The type of employee working in steel is similarly undergoing fundamental changes, and will continue to do so in coming years.
Bacon, N. (1997) "Non-Union Industrial Relations: Lessons From a Case in the Steel Industry", mimeo., University of Nottingham.
Beauman, C. (1996) "British Steel: A Turnaround Under Public Ownership", in Business Strategy Review, 7 (3): 16-29.
Blyton, P.; Franz, H-W.; Morris, J.; Bacon, N.; Lichte, R. (1993) Changes in Work Organisation in the UK and German Steel Industries. Implications for Trade Unions and Industrial Relations (London, Anglo-German Foundation).
Blyton, P.; Bacon, N.; Morris, J. (1996) "Working In Steel: Steelworkers' Attitudes to Change 40 Years On", in Industrial Relations Journal, 27 (2): 155-65.
Blyton, P.; Bacon, N. (1997) "Re-casting the Occupational Culture in Steel: Some Implications of Changing From Crews to Teams in the UK Steel Industry", in Sociological Review, 45 (1): 79-101.
Brannen, P.; Batstone,E.; Fatchett, D.; White, P. (1976) The Worker Directors (London, Hutchinson).
British Steel (1996) Report and Accounts 1995/96 (London).
Dore, R. (1986) Flexible Rigidities (London, Athlone).
Iron and Steel Statistics Bureau (1996) Iron and Steel Industry: Annual Statistics for the United Kingdom 1995 (London).
Johnson, A. (1996) Speech on British Steel, delivered to The Steel Industry In The New Millennium Conference, Terni, Italy, July 4-5.
