Beleaguered Corus is hold its annual general meeting today after a difficult year in which it was forced to close factories and cut more than 6,000 jobs in the UK.
Shareholders are expected to vote on the re-appointment of PricewaterhouseCoopers as auditor, the approval of a new employee share ownership plan, and authorisation to offer ordinary shares instead of cash as dividends.
Although the controversial re-structuring plan is not on the meeting’s agenda, ‘the chairman will make a statement at the beginning of the meeting in which he’ll touch on recent events,’ according to a company spokesman.
In March, despite government attempts to persuade Corus to keep staff losses to a minimum, chairman and chief executive Sir Brian Moffat said the group had ‘drawn a line in the sand’ at 6,500 UK job cuts, along with the 2,500 jobs the company said it would shed last year.
As early as March 2000, Corus said the strength of the pound could lead to job losses, and later, in June, the company began saying it was shedding jobs.
In February, Corus formally announced it was to cut more than 6,000 jobs in its UK operations as part of a major re-structuring deal that would increase its competitiveness. The job cuts are being implemented over three years.
‘The company is restructuring as a means of dealing with the losses incurred in the UK,’ said the spokesman, explaining that the declining demand for steel products and the strength of the pound have forced Corus into this situation.
‘If any shareholders want to express views about cutbacks in the UK, I’m sure the chairman will explain the economics to them,’ he added.
He also said: ‘If we make steel in the UK and sell it outside the UK, we don’t make a profit. We have a large plant in Holland which produces flat steel.’
In order to cut its exchange losses and transport costs, Corus has decided to reduce its steel-making capacity in the UK to match demand in its home market, leaving the Netherlands plant to supply the rest of the Europe.
Along with the job cuts, Corus has seen a change in its leadership. Two new directors are up for election at the agm, along with the five up for re-election.
On 1 February, David Lloyd was appointed as finance director of Corus. ‘He hit the deck running,’ said the spokesman. ‘He reorganised the group’s finances and he has had a hand on the employees’ job saving scheme.’
Lloyd joined Corus’ predeccessor company British Steel in 1985 and has held several senior positions in the company. Last year, Lloyd was appointed deputy finance director. He succeeds chartered accountant John Rennocks, who retired after serving as finance director for five years.
Annual results to December 30, 2000
Group turnover: Pounds 11.7bn
Total operating costs: Pounds 12.9bn
Group operating loss: Pounds 1.2bn
Market capitalisation: Pounds 2bn
Executive directors: Sir Brian Moffat, chairman and interim CEO (from 5 December 2000), David Lloyd, finance director, appointed in February.
Company profile: Formed in 1999 from the merger of British Steel and Dutch company Koninklijke Hoogovens.
Headquartered in London. Shares listed on the London, New York and Amsterdam stock exchanges.