Lucas sets up line for whistle-blowers line

Lucas Industries has appointed a corporate ethics officers and set up a whistle-blower's hotline to allow workers to give information about suspected wrong-doing at the company.

The move is part of Lucas's attempt to repair its image after revelations in the US about the falsification of tests on components supplied to the US Navy.

All Lucas Aerospace employees are to get details of a code of ethical conduct, which includes warnings about bribery, insider trading and security. The move is so far confined to the aerospace division, which is involved in sensitive defence work. But the ethics programme may be broadened to include the motors division and remainder of the company's workers.

In the UK and US two senior Lucas personnel officers have been nominated to investigate claims of wrong-doing and report to an ethics committee. Each Lucas site has its ethics officer. And an independent monitor has been appointed who will report directly to Frank Turner, managing director of Lucas Aerospace. Bernard Fried, an American lawyer, will investigate the company's operations worldwide.

Lucas's reputation was badly tarnished when it was revealed that two US divisions were under criminal investigation.

Tests on aircraft gearboxes and missile launchers were falsified and the company was accused of using sub-standard material.

The US Navy was said to have demanded that Lucas be barred from US military business, though component supplies have been resumed.

The introduction of better monitoring of the company's ethical behaviour in the US is thought to have been demanded by Pentagon officials.

Last year, Lucas made an out of court settlement of $12m (£7.6m) concerning its AUL division at Long Island. And yesterday, a Los Angeles court was expected to approve an $18.5m settlement for the Lucas Western operations. in California and Utah.

Managers at both divisions were removed as part of a fundamental overhaul of the operations.

Lucas still faces civil action over Western, though the company said all fines and costs will be covered by provisions of £87.6m made in the last accounts.

A spokesman said the US telephone hotline had encouraged spurious claims from workers, but this had not been a problem in the UK.

``The cost of introducing this has not been inconsiderable, but we are confident it will be worth it,'' he said.