270 jobs lost as Tata Steel closes Scottish operations
Steel firm Tata has announced the closure of its two Scottish plants with the loss of 270 jobs as the firm plans to stop production of steel plate across its European business.
Tata said today’s announcement comes in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs.
The proposed changes to Tata’s Long Products Europe business will also see 900 jobs go at its facility in Scunthorpe, bringing the total loss of jobs up to 1,200 across its UK sites.
Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed while one of the two coke ovens at the Scunthorpe steelworks would be closed.
Karl Koehler, chief executive of Tata Steel’s European operations, said: “I realise how distressing this news will be for all those affected. We have looked at all other options before proposing these changes.
“We will work closely with affected employees and their trade union representatives. We will look to redeploy employees, wherever possible, and minimise employee hardship.
“The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth. The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”
In the past two years, imports of steel plate into Europe have doubled and imports from China have quadrupled, causing steel prices to fall steeply. At the same time, a stronger pound has undermined the competitiveness of the business’s Europe-bound exports, and encouraged more imports.
In response, Tata Steel is concentrating on higher-value markets with a focus on developing stronger and lighter products for its customers.
Bimlendra Jha, executive chairman of the stand-alone Long Products Europe business, said: “Today’s proposals mark the next step in reshaping our business to give it the best chance of survival in this fiercely-competitive global marketplace. We are looking closely at the performance of all parts of Long Products Europe as part of a focus on returning to profitability.”
The consultation process with Tata Steel employees and their trade union representatives begins today.
First minister Nicola Sturgeon said a Task Force has been established to seek a viable alternative to the potential mothballing of Tata Steel operations in Scotland.
The Scottish Steel Task Force will look for new owners for some or all of the business, support affected workers to remain in place whilst alternative operators are sought and consider the regeneration needs of the wider area.
The Task Force will be chaired by business minister Fergus Ewing and will include representatives from Tata Steel, trade unions, North Lanarkshire Council, South Lanarkshire Council, Scottish Government agencies and local politicians and will meet for the first time on October 29.
The first minister will also visit both plants this Thursday to meet with employees, unions and management.
Ms Sturgeon said: “This is a very anxious time for Tata Steel employees and their families and is deeply concerning for everyone involved.
“My government is determined to fight for a future for our steel industry.
“That is why I have established a Scottish Steel Task Force – to be chaired by my Business Minister, Fergus Ewing - that will bring together all the key representatives to work to keep the Dalzell and Clydebridge plants open.
“We will leave no stone unturned in our efforts to keep the plants open and support the 270 staff affected by today’s announcement.”
Business minister Fergus Ewing said: “The Scottish Government’s priority is finding a way to continue with commercial production at the sites.
“Since Tata Steel first announced the potential sale of its Long Products Division last year, the Scottish Government and Scottish Enterprise have been in constant contact with the company and trade unions, exploring every possible option to keep these plants operational.
“Building on the significant amount of work that has taken place and given the potential impacts on the workforce, local communities and wider industry in Scotland, I am now convening a joint Scottish Steel Task Force to work closely with Tata Steel, trades unions, local councils and politicians.
“I will be writing to the UK government to urge them to respond quickly to industry demands for action and to play their full part in our efforts to keep these plants open.
“The Task Force’s focus will be to explore every option to find a viable future for the two sites. Market conditions are hugely challenging but we will explore all options to keep operations going and secure as many Scottish steel jobs as possible.
“The search for an alternative operator is our priority, however our initiative for responding to redundancy situations Partnership Action for Continuing Employment stands ready to work with Tata Steel and with workforce representatives to provide a tailored package of support, if required, to minimise the time any individuals affected by redundancy are out of work. The Task Force will also look to accelerate regeneration activities in the local area.”
Prime minister David Cameron has pledged to raise the issue of the “dumping” of cheap steel with Chinese president Xi Jinping, who is in the UK for four days on a state visit, as the crisis in the industry grows.
He told the Commons no subjects were off the table during the visit.