Tata Steel Sell-Off to Threaten Workers in North East; INDUSTRY

The Journal (Newcastle, England), March 31, 2016 | Go to article overview

Tata Steel Sell-Off to Threaten Workers in North East; INDUSTRY


Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

AN estimated 40,000 jobs could be lost in UK steelmaking communities - including hundreds across the North East - if no buyer is found for Tata Steel's UK business, new analysis has revealed.

Following the decision by India's Tata Steel to sell all or part of its UK business, experts at think tank IPPR has looked at employee numbers at the plants and within the supply chain, uncovering a devastating list of potential losses.

Tata Steel's UK business employs 15,000 people, with a further 25,000 jobs in the supply chain estimated to depend on the steel plants.

That figure includes around 1,100 workers across the North East at sites including Lackenby works, Hartlepool Pipe Mill, Teesside Beam Mill and Skinningrove Special Profiles.

The largest plant is in Port Talbot, South Wales, where there are currently around 4,000 workers and a further 6,600 dependent jobs in the supply chain.

IPPR say in reality the likely job losses related to the closure of Tata steel plants will be higher as these estimates do not capture the further impact of lost demand in the local economies from reduced spending power of workers and their families. This could lead to further business closures and job losses outside of the steel sector.

Alfie Stirling, IPPR Research Fellow, said: "British steel is facing extremely difficult trading conditions with slowing demand for steel from China having knock-on effects for the industry right across the world.

"In addition, there is currently significant state investment in new steel facilities and plants from regions that are traditionally net importers of steel, such as North Africa and South East Asia. Combined with existing excess capacity in Europe, the US, Russia and China, this is widening the gap between the amount of steel the world can make and the amount it actually needs.

"The costs of sustaining all this excess capacity is biting heavily into the profit margins of steel producers around the world."

The research comes as unions and political leaders call for urgent action following the company's decision, which was taken at a board meeting in Mumbai and published on the London Stock Exchange.

Despite the announcement, the firm said discussions are continuing with investment firm GreyBull Capital over plans to buy the Long Products Europe (LPE) arm of Tata Steel Europe , giving some hope to around 700 North East employees.

LPE employs about 700 staff at its Teesside Beam Mill in Lackenby, Redcar, and Skinningrove works.

The statement issued in Mumbai by the Tata Steel board said it had carried out a complete review of the recent performance of Tata Steel UK and noted "with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months". Under these adverse market conditions, the Tata Steel Group said it has extended substantial financial support to the UK business and suffered asset impairment of more than PS2bn in the last five years. …

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