Frenchman replaces Moffat at Corus
Troubled steel giant hires Pechiney chief after high-profile union campaign claims chairman's scalp
Corus, the embattled Anglo-Dutch steel maker, yesterday hired a new chief executive on a £1.7m pay package and yielded to employee and shareholder pressure by replacing its much-criticised chairman, Sir Brian Moffat.
The new chief executive is the Frenchman Philippe Varin, a metals industry veteran who has spent the past 25 years with the aluminium producer Pechiney. He replaces Tony Pedder who was ousted last month after the sale of the group's own aluminium business, ironically enough to Pechiney, was blocked by Corus's Dutch supervisory board.
Sir Brian, meanwhile, will retire as chairman at the end of next month after a high-profile union campaign for his removal. He will be replaced by Corus's deputy chairmen, Jim Leng. M. Varin, 50, made it clear that he still intended to press ahead with the disposal of Corus's aluminium business.
He also indicated that the group would be open to merger offers once it had tackled the immediate problems of its loss-making UK carbon steels division and the refinancing of its debt.
Corus is due to set out more details at next week's annual shareholders' meeting of the plant closures and job cuts it intends to implement to bring its UK operations back into profit. There are fears that 3,000 jobs and one of its three remaining integrated steel plants will be axed.
M. Varin will receive £690,000 in salary, a £207,000 pension contribution and a guaranteed first-year bonus of £140,000. In addition he will receive £550,000 compensation for giving up his share options in Pechiney and 1.1 million Corus shares worth £100,000 provided he buys the same number of shares out of his own money. He will also be entitled to 3.3 million share options which will be exercisable only if he retains his 1.1 million ordinary shares in the company.
The main steel union, the ISTC, described the appointments of M. Varin and Mr Leng as "much needed and welcome".
Michael Leahy, the union's general secretary, said Corus had been "crying out for new blood at the top", adding that the departure of Sir Brian marked an opportunity to forge a new culture of partnership and respect.
Corus is understood to have held discussions in recent weeks about a possible merger with both LNM, the steel company owned by the controversial Labour Party donor Lakshmi Mittal, and CSN, the Brazilian company it had planned to take over last year.
Asked whether Corus would seek a merger partner under his leadership, M. Varin, said: "I wouldn't exclude such developments in future but it is not the priority at present." As for whether Corus would seek another buyer for its aluminium business after the £543m sale of the business to Pechiney fell through in March, M. Varin said: "Corus has taken a very clear decision to focus on carbon steels and there is no reason to change that position."
M. Varin is married with four children and is a graduate of France's elite Ecole Polytechnique. He will relocate from Paris to London when he formally takes up the post on 1 May. He has been with Pechiney since 1978, his last job being senior executive vice-president.
"Whilst I do not underestimate the challenge ahead, I believe that with the right leadership and commitment Corus can become united, internationally competitive and profitable," he said.
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