Case Study: Elementis and Michelin

The companies some of whose HRM policies form the basis of this case are
subsidiaries of two multinational companies located in Scotland.

Health and Safety in Elementis

Elementis is a subsidiary of an American multinational chemicals manufacturing

company and is located in the industrial central belt of Scotland. It has 60 employees
and makes additives that alter the flow of substances. It has an excellent safety
management performance and its care for environment record has won various national
and regional awards.
The company works to corporate standards tailored to US culture and
environment, but modified to comply with UK regulations. They also comply with health
and safety regulations specific to Scotland. For instance, in the US window glass must
be tinted in order to protect computer operators from the reflection of sunshine on their
screens, but in the UK this is not acceptable and office windows must have adjustable
blinds or curtains instead of tinted glass. As a result, the office windows have both
tinted glass and curtains.
Our subsidiarys rules content reflect all the health and safety aspects of the
corporation, all the way from Houston down to Erskine [in Scotland]. There are 43
standard operational procedures from the US, added to that are EU and UK and
Scotland, even local council regulations. The parent company involvement is limited to
us having to comply with the 43 items which come from the US. If there are conflicts
between these and the UK ones, the latter take precedence.
Compliance to local rules is part of the companys strategy, and indeed its legal
obligation. In the US each state has a different set of regulations; as a result each
subsidiary has to be compliant to its respective local regulations.
The decentralization of health and safety matters goes beyond the obligation to
comply with local rules and regulations. The subsidiaries have specific health and safety

initiatives which are sharper than is the norm in many companies, because they are at
the near end of the industry. They have short term initiatives as they need to respond
to accidents and problems immediately. They must be able to change things within
weeks. The Head Office takes a more long-term approach to health and safety (23
years time scales).

Industrial Relations in Michelin

Michelin, the well-known manufacturer of tyres, is a French Company with
subsidiaries in 80 locations and 125,000 employees around the world, including
Germany, Spain, Poland, USA, Asia, Mexico, Brazil and Columbia. It was established in
1889, and has its headquarters in Claremont, France. The majority of the factories are
in France and the company has a huge segment of the French market. The Dundee site
(in Scotland) is 27 years old and has just fewer than 1,100 employees.
The company is unionized and around 750 of its employees are represented by
two unions: Transport and General Workers Union (TGWU) and Amalgamated
Engineering Workers Union (AEWU).
The union recognition agreement that the company employs states the
employees rights in terms of bargaining with their employer and covers all wages and
conditions of the 750 members.
We develop our policies through consultation with our members, with an awareness of
the economic situation within the company and external to the company and we are
provided with a whole host of support resources from the union research department
and at the end of the day we determine the employment policy issues we wish to
develop. So its not AEWU or TGWU dictating what issues we should peruse. Its to us
to arrive at what we believe is in the best interests of our members with an awareness
of the policies of the union. Within that we have a lot of flexibility. We would then
submit our proposals to the personnel department who would then circulate it to the
other three UK sites. They will then be discussed at the annual meeting of the union
convenors and lay delegates of the four sites.

The union officials also seek advice from their international affiliates and
academics to inform themselves on such matters as current rates of pay, allowances
and benefits, and get a feel of the overall health of the industry in general and the
direction it is going in, the kind of technology that is employed, and the effect of
globalization on the tyre industry.
We also meet on an international basis through tyre organizations [i.e. trade
unions] and the Transnational Information Exchange, a Dutch based organization for
the labor movement. And through that we sometimes get European funds. We would
pull on people from Brazil, America, Europe and Japan and we would exchange
information. So we are a very well organized industry at the trade union level.
We believe its in our interest to ensure that minimum standards are applied
within the UK, and the best way for us to understand what is happening in the industry
and to achieve those minimal standards across the board so we are not played off
against one another, is to have this sort of meetings where we exchange information. It
is also a good vehicle for us to see new trends coming in and to point us in the right
direction that Michelin may not have raised with us yet but that we know is getting
raised in other multinationals and its coming to our door soon; it allows us to educate
ourselves and make ourselves aware of relevant issues.
Under the legislation regarding the European Works Councils, the unions have
negotiated with Michelin to set up a works council in the Scottish subsidiary and work
out employee representation through the council.
In the last two decades or so there has been a sea change in UK industrial
relations, especially in those companies where employers have recognized trade unions
and see them as a valuable asset. In order to succeed, the relationship had to change
from one of adversarial, confrontational, and industrial muscle vs capital to one based
on mutual respect and cooperation. These were recipes which were ruining British
industry in the manufacturing base in the past, says one of the union officials in
Michelin, which is located in Dundee, a city known for its strong working class traditions
and entrenched support for trade unions.

In the current atmosphere of cooperation, we believe that with a strong trade

union organization and open management style and new HRM policies being deployed
in a way that isnt selfish, but respect people and benefits the community that it
represents in the factory then you can be very successful. We had a very adversarial,
confrontational position 10 years ago. Now we are possibly seen as one of the most
progressive sites, certainly in industrial relations terms, within Michelin and probably
within Scotland.
In addition to direct negotiations between shop stewards and the management,
there are communication channels through which the employees voices are heard
within the company. For instance the management has twice surveyed employees
opinions in the past to seek their views on various issues; it also holds frequent team
meetings and briefings. The team meetings, especially when they are organized by
shop floor employees at which managers also attend, provide an opportunity to
employees to get their voice heard on the issues they choose to discuss.
The issues that employees and management discuss and seek agreement on
cover a wide range, from pay and benefits, to working patterns, weekly working hours
and overtime, extending the production line, increasing production volume, new
projects, layoffs and redundancies, and financing the retraining of the employees who
may be made redundant, so that they can find another job.

CASE STUDY QUESTIONS

1. What are the various issues and regulations that Elementis managers take into
account when devising their health and safety policies?
Can they ignore some or all of them? Why?
2. What was the climate of industrial relations like, in Michelin in the past and what is it
like now? What caused the change?
3. How do employees get their views and preferences known to the management?
4. What role does the trade union play in this process?
5. What main policies are the unions able to influence in Michelin?

And how do they inform themselves of relevant issues in order to strengthen their
negotiating position?
6. In what ways do national and international institutions influence some of the policies
and practices that these two subsidiaries employ?