Page 2: The programme of change
The programme of change involved a radical overhaul of working practices, reward systems and, not least, company culture. The results included gaining a flexible, multi-skilled workforce working on annualised hours contracts which eliminated overtime. Higher productivity and lower unit costs have been reflected in the bottom-line. The programme enabled management- employee relations at the works to move from a “them and us” adversarial culture to one of greater employee involvement and shared goals: a “win/win” situation.
Like many companies in the UK in the 1980s, Blue Circle Cement was desperately in need of change. Blue Circle Cement is the UK’s largest cement producer, supplying about half of the country’s needs from ten cement works. The company’s Cauldon Cement Works is situated at the southern tip of the Pennine Chain near Stoke-on-Trent. Cement has been manufactured there since 1957. The factory supplies the West Midlands area and is the third largest belonging to Blue Circle Cement. In the early 1980s, it was decided to make a major investment of £40 million at Cauldon to build a new highly automated computer controlled plant capable of producing over 3,000 tonnes of cement per day.
The UK cement industry in the early 1980s was characterised by high manning levels of both staff and hourly paid workers; relatively low wages and high overtime levels. A working week in excess of 60 hours was common. Restrictive working practices were the norm, with strict demarcation between crafts and between process and craft workers. Additional payments were made for unsocial hours (overtime) and also for work in adverse conditions (e.g. excessive heat or dust). Under this system the more breakdowns that occurred, the more overtime had to be worked and the more employees earned.
Not surprisingly, productivity was very low even though the amount of supervision was high.
Morale was poor and conflict was common. Management and employee relationships were characterised by low levels of trust and an adversarial “them and us”, “win/lose” culture. All change was regarded with intense suspicion and involved much bargaining. Compounding this situation was the lack of international competitiveness, in particular with regard to Europe. In the early 1980s the UK cement market was in steep decline and under increasing threat from lower priced imports.
It was patently obvious that Blue Circle Cement could not continue in this way. Radical changes needed to be made in this deeply rooted culture. A new vision for the future was required. However, creating that vision was not something that management could do alone. Instead, Blue Circle Cement had the foresight to have early discussions with the Trade Unions, who readily accepted that the uncompetitive position could not continue.
At the time of these discussions the Cauldon Works was highly unionised with five recognised trade unions:
- GMB (Representing process workers)
- AEU (Amalgamated Engineering Union)
- EETPU (Electrical, Electronic, Telecommunications & Plumbing Union)
- TGWU (Transport and General Workers Union)
- BCSA (British Cement Staff Association)
The AEU and EETPU have now merged to form the AEEU. The Trade Unions gave their support to the initiative subject to negotiation, development and argument, so that collectively it was possible to develop a shared vision. To help in creating the vision the services of the Advisory Conciliation Arbitration Service (ACAS) Work Research Unit were called on. As an independent body it was seen as being impartial by both management and unions.