Tata Steel and the unions have called for urgent action from the UK and EU governments following confirmation from the steelmaker that 1,050 jobs are to be cut across its operations in the UK, as a result of relentless pressure on the European steel market from large quantities of low-cost steel being imported or “dumped” from markets such as China.
The majority of the jobs are to go at its Port Talbot Strip Products division in Wales, alongside 200 support roles, and 100 jobs at mills in Corby, Hartlepool and Trostre.
“These tough actions are critical in the face of difficult market conditions which are expected to continue for the foreseeable future,” said Karl Koehler, CEO of Tata Steel’s European operations.
He urged the European Commission to speed up its response to the dumping of steel in the European market, failure to do which would threaten the future of the “entire European steel industry.”
He also called on Britain to take further steps to help the industry be more competitive, while last year the European Commission introduced levies on certain categories of steel from outside the EU, industry has argued that far more and speedier action is needed. After much pressure from the industry, the UK government finally introduced a compensation package for the country’s energy-intensive industry for the high costs born as a result of green energy policies, but industry argues that far more action is needed to make their cost base comparable with those of other European steel-producing nations. Tata Steel’s British operations have faced a cocktail of pressures: the flooding of the European market with cheap product has hit prices, and comes at a time of tepid demand, while the strong pound has exacerbated the situation.
For a while, the company has pursued a strategy of focusing on high value added product and cost cutting.Long products division
Tata Steel’s attempts to sell long products division, for which it is currently in talks with Greybull Capital, is part of this strategy.
However, now, as a result of toughening conditions, the company had had to take further action to cut costs, said Stuart Wilkie, director of strip products. Unions also called on the government to take “meaningful” action.
“The UK Government must step up and work with trade unions and businesses to ensure this industry exists for generations to come,” said Roy Rickhuss of the Community Union, who added that he would be “vigorously challenging” Tata Steel on the job cut proposals during the consultation process.
He also called on Tata Steel to make clear its long-term commitment to steel production in the UK.
The Unite union also called for action, including for the government to begin implementing guidance that would use British steel for UK infrastructure projects.