Further UK steel job losses

Tata Steel today announced the loss of 1,050 jobs. In a press release Tata Steel confirmed the jobs would be lost as a result of cost saving measures to improve the competitiveness of its UK business, referring to Tata Steel UK as an “indirect subsidiary”.

750 jobs will be lost at Port Talbot, with 200 jobs lost in support functions and a further 100 in steel mills at Truster, Corby and Hartlepool. This follows the announcement of job losses in October.

It blames the proposed changes in the fall in European steel prices following the flood of Chinese cheap imports. China have been accused of ‘dumping’ cheap steel on the UK market and causing the current pricing crash.

“Unsettling” news

Karl Koehler, Chief Executive of Tata Steel’s European operations, said: “I know this news will be unsettling for all those affected, but these tough actions are critical in the face of extremely difficult market conditions which are expected to continue for the foreseeable future.

“We need the European Commission to accelerate its response to unfairly traded imports and increase the robustness of its actions. Not doing so threatens the future of the entire European steel industry. And while we welcome progress on UK energy costs, the Government must take urgent action to increase the competitiveness of the UK for its vital steel sector. This includes lowering business rates and supporting energy efficiency and anti-dumping cases so we can compete fairly.”

Tata Steel has invested £1.5 billion in its UK operations, including a new blast furnace at Port Talbot and has said it will consider how it can provide help to communities affected by the announcement and help stimulate job creation.

Stuart Wilkie, Director of Strip Products UK, said, “We will work closely with affected employees and their trade union representatives. Retaining the right skills for the future will be critical, but we will look to minimise employee hardship and redeploy employees where possible.”

In response to calls for the government to do more he said, “State aid or part nationalisation is not the way forward. We want a level playing field that we can compete on our own two feet.” 

Devastating blow

David Cameron has said the government will work closely with Tata Steel, local communities and the steel industry, however, Welsh First Minister Carwyn Jones has described the events as a devastating blow.

Roy Rickhuss, General Secretary of the Community trade union, demanded meaningful action, saying the dumping of Chinese steel was the cause of the crisis, whilst the UK government continued to be a “cheerleader” for China, which would eventually lead to the decimation of the UK steel industry.

Key facts

  • Tata Steel (previously Corus) is a multi national steel company headquartered in Mumbai, Maharashtra, India. It’s the second largest producer in Europe. Globally it has a steel capacity of 28m tonnes employing 80,000.
  • The steel industry collapsed, alongside many other commodities, in the financial crash of 2008 when demand for goods requiring steel such as cars and from the construction industry plummeted.
  • China is currently able to produce steel much cheaper than the UK and so is able to dump excess supply at lower costs on the international markets, thus pricing the UK out of the industry.
  • Tata Steel’s share price reached its peak in October 2007 but fell sharply in the crash of 2008, it is still only trading at about a quarter of its 2007 high.
  • Steel as a commodity is currently trading at about a sixth of its pre-crash high.