The largest steel producing plant in the UK is set to lose 2,800 jobs as it implements more modern steel-making methods.
Tata Steel has told unions it is to push ahead with plans to close both blast furnaces at its Port Talbot works in south Wales. It said it was not “feasible or affordable” to adopt trade union proposals to continue production at the loss-making plant during a transition to greener and cheaper steelmaking operations. About 200 positions will be saved by maintaining operations at the site’s hot strip mill, which rolls steel slab.
The decision follows a meeting between Tata executives and the Community, GMB and Unite unions at a London hotel today (Thursday 18 January) with a formal announcement by Tata made on Friday 19 January.
The government has provided £500 million for Tata’s £1.25bn four-year plan to build electric arc furnaces, which make steel from scrap metal rather than pure steel made from scratch.
Labour’s shadow business minister, Jonathan Reynolds, has said the strategy was one of “£500m for 3,000 job losses”.
The rejected “multi-union plan” put forward by the GMB and Community had argued that one of the blast furnaces should be kept open for a transitional period, alongside a new electric arc furnace, in order to safeguard jobs and preserve the UK’s ability to make new steel (the more environmentally friendly electric arc furnaces use scrap metal to produce usable steel). The Unite union had put forward a separate plan, which was rejected by the other two unions and by Tata.
Steel jobs
British Steel blast furnace closure plans puts jobs at risk
The first job losses taking place from April and most having disappeared by September. Further jobs will be lost in south Wales and across the UK in the substantial supply chain for the plant.
GMB national officer Charlotte Brumpton-Childs said the meeting with Tata on 18 January had been a “tough” one.
She had said: “We’ll let Tata make the announcement, as we said, we need to talk to our members about any detail before we talk to the press.”
“Any rejection of the multi-union fund that would avoid any compulsory redundancies and safeguard steel jobs, not just in south Wales, but across the supply chain would be a complete derogation of responsibility for both Tata Steel and the government.
“We make the best steel in the world in the UK, and it’s largely outside of the market conditions for the UK that make it uncompetitive.”
Tata said it would seek voluntary redundancies where possible and would provide £130m to fund severance payments, community programmes, skills training and job-seeking initiatives.
In November, British Steel announced plans to instal electric arc furnaces at its Scunthorpe plant, which could lead up to 2,000 job losses. British Steel, owned by Chinese steelmaker Jingye Group, said it would work with North Lincolnshire Council on a “masterplan” to attract new businesses and jobs to the site. The plans are currently being considered by the government but are expected to be approved shortly.
Once the steel industry moves over to electric arc furnaces, the UK will be the only G20 country without the means to make pure steel. The Community and GMB unions said that governments in France, Germany and Spain were all “committing billions to secure the future of their strategically important steel industries.”
Community general secretary Roy Rickhuss said: “They must reconsider, and the UK government must do much more to deliver the funding to retain our strategic steelmaking capability within the UK. The Labour Party has committed themselves to do this, should they win the General Election this year, and it is beyond belief that Tata is ploughing on with their decarbonisation-on-the-cheap plan with these assurances.
“We will now consult with our members and all options are on the table going forward. We will continue to make the case for our viable alternative to the destructive path Tata have laid out, and urge the politicians to deliver the co-investment our steel industry needs for a secure future. We need our steel, and decisions made now will reverberate for generations to come.”
Unite general secretary Sharon Graham said: “This is the time to defend British workers and communities, as well as our industrial base and our national security. More managed decline can only help the UK’s competitors – steel producers in other countries. Politicians need to make the right choices now or they will not be forgiven easily.”
Story updated on 19 January following Tata’s confirmation of the closure of the blast furnaces
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