The Xorpyl Manifesto

Some brief anecdotes, together with a news item: The Xorpyl Manifesto

In Jan 1992, I attended a job interview at Xorpyl Paints in Birmingham. When I returned to Oxford the same day I found my housemates in a state of great excitement: “Where have you been! The agency keeps ringing to speak to you – they want to offer you the job!” Two weeks later I rang the agency to ask why no letter had arrived, only to be told that the firm had cancelled all their plans for recruitment.

In Feb 1992 I went for another interview at Xorpyl, this time in a different department. While I was describing my research work, the interviewer cut me short, impatiently saying “Yes yes, all very interesting, but you’ve got no experience. We don’t really need anyone with your background, and we don’t think you’d fit in here.”

I was eventually offered the job at Xorpyl, and on my first day was taken to see the chief accountant. ‘Right, and where have you come from?’ he asked. I told him I had been living in Oxford; ‘No, no’ he said, ‘I mean which paint firm were you at before?’
When I said that I had never worked in the paint industry, he stopped writing and turned a look of scorn on my boss.

In 1995, after I had been with the company for about three years, the production manager called everyone into a meeting. He had discovered the scurrilous graffiti in the mens’ toilets, and harangued us in furious Anglo-Saxon. The following day he arranged for the writing to be cleaned off, and had a Yale lock fitted to the toilets, so that all the lab staff had to approach the Lab Manager – like the show Blockbusters – asking ‘Can I have a pee please, Bob?’

Then in 1996, having moved to our new site at Laxworth, we were regularly called upon to carry out cleaning duties as unpaid overtime; this would typically involve one hour twice a week. However, on one occasion we were ordered to report for cleaning duties on Saturday morning; this proved too much, and I decided to approach the MSF trade union for advice – a risky move, since union membership was banned at Xorpyl.

Popular phrases commonly used at Xorpyl included ‘Is there a problem with that?’, ‘You’re not here to think, you’re here to work’, and ‘To err is human; to forgive is not company policy’. The senior lab managers operated a confrontational approach, withholding all technical information from lab staff and having no career development programmes.

The following article shows a long-term strategic approach taken by Xorpyl Paints Ltd, a small manufacturing firm in Birmingham (‘Business Credit News UK’, 15/06/97; www.creditman.co.uk)

PAINT MAKERS’ PRICE-FIXING CARTEL ENDED

Company representatives attended meetings at a Birmingham hotel organised in the name of the Harland Golfing Society – but their real purpose was to agree not to undercut each other’s prices.

Their firms, which make powder paints, undertook to the Restrictive Practices Court in London last week not to enter into a price-fixing cartel in future.

Mr Justice Ferris, in making orders under the Restrictive Trade Practices Act 1976, was pleased to note that the respondents had not only offered undertakings to the court, but had also given indications of the compliance procedures they had taken or were taking.

The judge emphasised the need for effective measures to comply with such undertakings to be in place, the continuing process of compliance procedures, and that severe penalties could be imposed if such procedures broke down.

The court was told that the representatives reached an agreement to share information on prices charged to individual customers. Informal consultations took place between 1985 and 1993. The purpose was to prevent a competitor quoting to potential customers prices which would undercut the incumbent supplier.

A second agreement was reached by seven of the companies at a meeting which took place shortly after the devaluation of sterling against the D-Mark in September 1992. The devaluation substantially increased the prices of raw materials for UK manufacturers. The seven agreed to seek a multilateral price increase of 8.5% on their products.

Miss Pat Edwards, Legal Director at the Office of Fair Trading, said: The parties appear to have been aware that their conduct was unlawful, given that they used an assumed name to book hotel conference facilities.

‘Prior to the commencement of the proceedings, some of the companies submitted to the Office of Fair Trading that the pricing collusion had been organised and operated by employees without the authority of the companies.

The House of Lords ruled in 1994 that this argument is not acceptable. Companies are responsible in law when their employees participate in unlawful cartel agreements.’

The nine companies who were party to the price notification and maintenance agreement are:

Akzo Powder Coatings Limited (Staffs), Xorpyl Paints Limited, Croda Polymers International Limited, Ferro (Great Britain) Limited (West Mids), Herberts Powder Coatings Limited (Co. Durham), Holden Surface Coatings Limited , Courtaulds Coatings (Holdings) Limited, Sonneborn&Rieck Limited (Essex) and Trimite Limited (Avon). The seven companies which were party to the price-raising agreement of 21 October 1992 were Akzo Powder Coatings Limited, Herberts Powder Coatings Limited, Holden Surface Coatings Limited, Courtaulds Coatings (Holdings) Limited, Croda Polymers International Limited, Sonneborn&Rieck Limited and Ferro (Great Britain) Limited.

Powder coatings are a relatively modern alternative to traditional ( wet’) paint and are made from various raw materials including epoxy and polyester resins, pigments, hardeners and extenders. A high proportion of these components are imported from Germany or other countries whose currencies are linked to the D-Mark.

The collusive behaviour was categorised under two main headings:

  1. Price-swapping (whereby the      nine participants agreed to exchange information on prices currently being      charged to individual clients) and
  2. Price-fixing (whereby the      seven participants agreed at a meeting in October 1992 to impose a      multilateral price increase of 8.5% on their powder coatings.)

Under the Restrictive Trade Practices Act 1976, details of agreements between two or more persons carrying on business within the United Kingdom in the supply of goods of services are required to be furnished to the Director General for registration if two or more of the parties to the agreement accept certain kinds of restriction on their commercial freedom. Failure to furnish an agreement within the time limits specified by the Act renders the restrictions in the agreement void and legally unenforceable.

Section 1 of the Act, subject to certain exceptions, requires the Director General to refer all registered agreements to the Restrictive Practices Court for a ruling as to whether the restrictions in the agreement are against the public interest. The Court may order the parties not to give effect to, or enforce, or try to enforce, the restrictions in the agreement and not to make any other similar agreement. Failure to furnish particulars of an agreement is not a criminal offence, but anyone adversely affected by its operation has grounds for action in the civil courts.

If the details of a registrable agreement are not furnished within the time required by the Act, section 35 empowers the Director General to apply to the Court for an Order to be made restraining any party to an agreement, who carries on business in the United Kingdom, from giving effect to, or enforcing, or trying to enforce, the restrictions in the agreement, or any restrictions in any other registrable agreement, details of which have not been notified in time.

Any breach of an Order made by the Court, or of an undertaking which it has accepted in lieu of an Order, may give rise to proceedings for contempt of court. The Office of Fair Trading operates a task force dedicated to identifying secret price fixing and market sharing cartels, which can be contacted on a 24-hour telephone/fax hot-line number: 0171-269 8888.

Mr Griffith said: “We are determined to ensure that UK consumers have the best protection from unscrupulous traders using unfair contracts.”

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