Britain’s biggest steelmaker is set to deal a new blow to the industry by axing up to 1,200 jobs at a plant in Scunthorpe and at two sites in Scotland.
A widening of the crisis in the industry came as Sajid Javid, the business secretary, promised to try to help competitiveness when he oversaw an emergency national steel summit in Rotherham, West Yorkshire.
Tata Steel UK, which owns the rump of the former British Steel group, is expected to announce the Scunthorpe job losses next week. These redundancies will add to Tata’s own earlier cuts and to the recent collapse of the Redcar steelworks on Teesside. SSI UK, owned by Thailand’s Sahaviriya Steel Industries, went into liquidation earlier this month with the loss of 2,200 jobs after its owner said it could no longer sustain mounting losses.
An industry source said the latest jobs cull at Tata, which includes the Dalzell and Clydebridge sites in Scotland – would be followed by further cuts across the company’s long products division, which makes steel for the rail and construction industries.
It is thought Tata, the Indian conglomerate that also owns Jaguar Land Rover and Tetley Tea, is also preparing to cut several hundred roles in operations that serve the Scunthorpe plant, mainly at its Rotherham site.
However, sources suggested that if current market conditions prevail, Tata executives may opt to wind down the Scunthorpe operation over the next few years.
One source said: “[Tata Steel] really want to shut Scunthorpe; they want to get out of long products because to make that sort of steel in England is uncompetitive.”
Tata employs 3,000 people at the Scunthorpe site, with hundreds more in satellite operations within the long products division.
The 151-year-old Scunthorpe plant has been on the endangered list ever since August, when Gary Klesch, the billionaire industrialist who owns the Klesch group of global industrial commodities, walked away from a deal to buy the lossmaking mill.
Britain’s steel industry has been battered by a toxic cocktail of cheap Chinese competition, high energy costs, a strong pound and slowing demand.
CBI director general John Cridland described the job losses in Scunthorpe as devastating and said the government should work with business to develop a long-term industrial strategy.
Javid said the government, which has been criticised for not intervening earlier, would set up working groups chaired by ministers which would look at how to win more contracts, learn from foreign competitors and make UK companies more competitive.
“There is no straightforward solution to the complex global challenges facing the steel industry. But today was an important opportunity to bring the key players together and we now have a framework of action,” he said.
“The government is committed to working closely with industry on both short-term and long-term issues and to doing everything we can to support both industry and the workers. A strong economy underpins everything and we will continue to focus on securing the UKs economic recovery across the UK.”
Losses at the country’s biggest steelmaker doubled last year to £768m. Tata has responded by slashing jobs, mothballing the Llanwern works near Newport, South Wales, and embarking on the failed attempt to sell the Scunthorpe mill.
Tata’s Rotherham site operates within the steelmaker’s long products division and specialises in making high-grade steels for the automotive, aerospace and civil engineering sectors.
Tata Steel UK said: “Our Long Products Europe business is working with employees and their trade union representatives on a programme to develop a future for the business. The economic conditions affecting the UK steel industry are well known. We are dealing with surging, and often unfairly traded, imports compounded by a strong pound and unhelpful policy costs.”
The plight of Scunthorpe comes as union leaders called on ministers to take “concrete and positive” action to save Britain’s steel industry at a crisis summit.
Roy Rickhuss, general secretary of Community, which represents the majority of those affected, said: “We’ll be seeking further discussions with Tata Steel to understand the full detail, examine alternatives that may safeguard jobs and uphold our principle of opposing compulsory redundancies.”
The gathering of ministers and business and union leaders was called following the closure of SSI’s plant in Redcar.
Previously the government had shrugged off calls to intervene. Ministers acknowledge the industry faces terrible headwinds, but warn there is no magic bullet to solve these problems.
The TUC said it was worried that the government was doing too little too late. Commenting on the potential Tata redundancies, TUC General Secretary Frances O’Grady said:
“This would be a hammer-blow for British steel-making and manufacturing in the UK. Ministers have been far too slow to wake-up to the crisis facing heavy industry in Britain. Today’s crisis summit should have happened months ago not at the eleventh hour.”
Source: https://www.theguardian.com
