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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 subsidiary’s 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 company’s 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

So it’s not AEWU or TGWU dictating what issues we should peruse.000 employees around the world. Asia. Poland. and has its headquarters in Claremont. The majority of the factories are in France and the company has a huge segment of the French market. because they are at the near end of the industry. Brazil and Columbia. 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. Spain. Within that we have a lot of flexibility.’ . The Head Office takes a more long-term approach to health and safety (2–3 years time scales). the well-known manufacturer of tyres. ‘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.100 employees. It was established in 1889. France. Industrial Relations in Michelin Michelin. They have short term initiatives as they need to respond to accidents and problems immediately. 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. including Germany. is a French Company with subsidiaries in 80 locations and 125. It’s 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. They must be able to change things within weeks.initiatives which are sharper than is the norm in many companies. The Dundee site (in Scotland) is 27 years old and has just fewer than 1. Mexico. USA.

e.The union officials also seek advice from their international affiliates and academics to inform themselves on such matters as current rates of pay. a city known for its strong working class traditions and entrenched support for trade unions. ‘We also meet on an international basis through tyre organizations [i. especially in those companies where employers have recognized trade unions and see them as a valuable asset. trade unions] and the Transnational Information Exchange. And through that we sometimes get European funds. ‘These were recipes which were ruining British industry in the manufacturing base in the past’. In order to succeed. Europe and Japan and we would exchange information. is to have this sort of meetings where we exchange information. the relationship had to change from one of adversarial. allowances and benefits. and industrial muscle vs capital to one based on mutual respect and cooperation. In the last two decades or so there has been a sea change in UK industrial relations. the unions have negotiated with Michelin to set up a works council in the Scottish subsidiary and work out employee representation through the council. We would pull on people from Brazil. says one of the union officials in Michelin. We believe it’s in our interest to ensure that minimum standards are applied within the UK. and the effect of globalization on the tyre industry. 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 it’s coming to our door soon. which is located in Dundee. . it allows us to educate ourselves and make ourselves aware of relevant issues. 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.’ Under the legislation regarding the European Works Councils. So we are a very well organized industry at the trade union level. the kind of technology that is employed. and get a feel of the overall health of the industry in general and the direction it is going in. confrontational. a Dutch based organization for the labor movement. America.

provide an opportunity to employees to get their voice heard on the issues they choose to discuss. especially when they are organized by shop floor employees at which managers also attend. ’ In addition to direct negotiations between shop stewards and the management. weekly working hours and overtime. but respect people and benefits the community that it represents in the factory then you can be very successful. new projects. 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. and financing the retraining of the employees who may be made redundant. extending the production line. What main policies are the unions able to influence in Michelin? . in Michelin in the past and what is it like now? What caused the change? 3. it also holds frequent team meetings and briefings. The team meetings. there are communication channels through which the employees’ ‘voices are heard’ within the company. so that they can find another job. from pay and benefits. How do employees get their views and preferences known to the management? 4. Now we are possibly seen as one of the most progressive sites. to working patterns. What was the climate of industrial relations like. The issues that employees and management discuss and seek agreement on cover a wide range. We had a very adversarial. CASE STUDY QUESTIONS 1.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 isn’t selfish. within Michelin and probably within Scotland. confrontational position 10 years ago. increasing production volume. layoffs and redundancies. What role does the trade union play in this process? 5. For instance the management has twice surveyed employees’ opinions in the past to seek their views on various issues. certainly in industrial relations terms.

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? .