Word: melchett
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...country faces what the London Times calls "one of the gravest raw materials crises since wartime controls." Stainless-steel prices have climbed 35% since August. Rolls-Royce is reclaiming the metal from scrapped engines, and some auto manufacturers will probably cut down on nickel-bearing chromium trim. Lord Melchett, head of the British Steel Corp., has appealed to the Soviets, who also produce nickel, to sell more...
...took over steel in 1967, officials proclaimed efficiency to be their primary objective. They argued that the fragmented private industry, which earned 1.9% on investment in 1966, could not acquire the capital to build the modern mills needed to compete with Japan and the U.S. The Laborites induced Lord Melchett, a Tory banker and philosophical opponent of nationalization, to accept the chairmanship of BSC on the promise that he would be allowed to run it in a strictly businesslike fashion. He quickly ran into political roadblocks...
...mollify opposition to nationalization, the government divided BSC into four geographical regions, each run by an executive of an old private steel company. The regional managers tried to maintain their operations as separate entities and ignored Melchett's efforts to exert centralized control. One manager, for example, announced an ambitious investment plan without even telling Melchett about it. Lately, however, Melchett has got a firm enough grip on BSC to draft a long-range modernization program...
...that modernization, however, have yet to succeed. Although BSC had 1968 sales of $2.6 billion, which ranked it as the world's third biggest steelmaker, behind U.S. Steel and Bethlehem, the company lost $29 million, and there is no immediate prospect of getting out of the red. Melchett has been frustrated in efforts to cut costs, partly by the government's policy of protecting the nationalized coal mines. BSC is not allowed to import low-cost foreign coal, and purchases of foreign oil are taxed extravagantly; as a result, steel's fuel bills are excessively high...
...Melchett was stopped by the government's Prices and Incomes Board, which ruled late in May that BSC could raise prices only $96 million. The board's order was intended to help British export industries-most of which are not nationalized-by holding down the costs of their steel. Melchett angrily protested against forcing BSC to subsidize exports, but to little avail...