By John Donovan
There is nothing new about Shell making massive job cuts.
It happened most recently, a decade ago, under Shell Group Chairman Mark Moody-Stuart. In those days the panic driven restructuring was called “Transformation”, whereas under Peter Voser, it’s called Transition 2009. Basically the same unpalatable medicine, under a different name. Unfortunately, then, as now, the doctor prescribing the medicine, benefits financially from the treatment. Hence the danger of an overdose.
Some extracts from leaflets we distributed outside Shell HQ offices during that unpleasant period…
Leaflet entitled: “A SLASH AND BURN” CULTURE AT SHELL“ (Distributed December 1998)
An article in The Sunday Times published on 13th December mentioned that Mr Moody-Stuarts “onslaught on Shell’s bloated bureaucracy … will lead to more than 3,000 job losses”. They described his plans as: “a slash and burn culture at Shell”.
In September I compared Mr Moody-Stuart with the Captain of the ill-fated Titanic. The recent devastating cuts and closures at Shell prove just how prophetic that comparison turned out to be.
The imagery of a Shell Chairman with a high moral background was reinforced by the emphatic pronouncements made by Mr Moody-Stuart about his absolute commitment to Shell’s Statement of General Business Principles. He said that the principles, which include fairness and respect for people, were “non-contestable and non-negotiable”. Impressive stuff. He appeared to be seeking Sainthood,
rather than the mere Knighthood achieved by his predecessor. Is Mr Moody-Stuart genuinely someone of exceptional moral fibre, or just another selfish, ruthless, corporate “Fat Cat”?
An emphatic answer was provided by an executive pay survey published in the Sunday Times on 25th October 1998. It stated that Mr Moody-Stuart is overpaid by a massive £568,887 per annum. The latest bout of “downsizing” will have the happy effect of generating even more share incentive, bonus etc. for him and his colleagues. How on earth can this be morally justified?
According to the latest press statement, he now wants to move further and faster with the pace of “restructuring”. Comments that many Shell staff must have read with great trepidation. It seems to me that the balance between the interests of shareholders and employees has swung too far in one direction. Shell cannot legitimately claim to have respect for people as a core principle when its own employees have to live in a climate of fear and uncertainty.
Some related press articles
Shell told to axe 20,000 6 December 1998
Shell to spell out wide-ranging cuts 14 December 1998
Shell to cut $2.5bn in costs and at least 4,000 more jobs 15 December 1998
in view of Moody-Stuarts claimed commitment to Shell business principles, it is interesting to note that the seeds of the reserves scandal were sown during his reign, with the setting-up of “value creation teams” who conjured up oil and gas reserves figures which, according the the US Securities & Exchange Commission, were fraudulent. Shell also engaged in sleazy undercover activity with his blessing and, along with his colleagues, Malcolm Brinded and Richard Wiseman, he gave his support to Shell UK managers who engaged in a conspiracy to operate a corrupted tender process for a major Shell contract. All proof that it is deeds, not words, which count.
Our leaflets were popular with Shell staff, but not with the Moody-Stuart family. This was plain from a handwritten letter we received from Judy Moody-Stuart who, unlike her Fat Cat husband, IS a saintly person.
Since we believe that Shell employees need our vocal support again, we will very shortly recommence distribution of leaflets at Shell Centre. As promised, Royal Dutch Shell Chief Ethics & Compliance Officer, Richard Wiseman, will be informed in advance. This is appropriate in view of the content.
With regards to the Exploration and Production division headed by Malcolm “Overpromise and Underdelivery” Brinded, the underlying concern is that Shell elephant projects are moving from the development phase, involving very large numbers of people, to the production phase, involving far fewer people. Due to incompetence at the very top, there are no projects starting up to replace them. The only elephant projects in which Shell is involved these days are operated by partners eg. Gorgon. Basically the EP work load is fast reducing and there are no economically viable mega projects on the horizon.
Hence Shell’s share price will continue to decline.