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Workers 'devastated' as 1,700 jobs to go with mothballing of SSI steel plant

Published 28/09/2015

Iron and steelmaking at Redcar will be mothballed
Iron and steelmaking at Redcar will be mothballed
Iron and steelmaking at the plant is to be mothballed

Workers have been left "devastated" after grim news that iron and steelmaking at a huge plant is to be mothballed, with the loss of 1,700 jobs.

Thai-owned firm SSI said it had no option but to mothball facilities at its Redcar site on Teesside following a slump in the price of steel this year.

But the local Labour MP accused the company of playing "fast and loose" with the plant's future, while unions said the Government should take some responsibility for the decision.

Cornelius Louwrens, SSI's UK business director and chief operating officer, said: "This is an extremely sad day for all of us at SSI UK, and in particular our employees and their families. Together with our parent company and the various other stakeholders, they have worked so hard in their endeavours to try and make this business successful.

"Despite the significant progress we made in the financial performance of the business during 2014, market conditions this year have been extremely challenging and unfortunately this has led to the decision we are announcing today.

"I would like to pay tribute to and thank everyone connected with SSI UK for their great support. My wish is that this facility can once again restart operations and fulfil the potential of the plant and its loyal workforce."

Roy Rickhuss, general secretary of the Community union, said: "We had begun to fear the worst over the past few days and this will be devastating news for our members and their families. We will be seeking an urgent meeting with the company to understand the detail of this announcement. We will also be putting in place support for our members in the days and weeks ahead.

"Steelmaking on Teesside must have a future and our fight to save our steel will continue. The industrial assets must be preserved at all costs and the skills base also needs to be protected.

"These vital industrial skills have been passed down through the generations and must not be lost. That blast furnace must not become a monument to 170 years of history and it must be mothballed properly to preserve its integrity and give it the chance of a future.

"We have serious concerns about the ability of SSI to do this and so the Government must step in to ensure that the mothballing is done properly.

"The cost of inaction and the demise of the assets could extend to hundreds of millions of pounds. Not just the cost of cleaning up the site but the economic and social costs from devastating an entire steel community and the lives of the thousands of families who depend upon it.

"The Prime Minister said his Government would do 'everything we can' to support the UK steel industry. He needs to deliver on that. Now is the time to demonstrate the political will to see a vital foundation industry continue.

"Steelworkers will not give up on their industry and their heritage. The Government must not give up on Teesside's steelworkers."

Redcar's Labour MP Anna Turley accused SSI of playing "fast and loose" with the plant's future, and claimed the Government could have done more to prevent the closure. She told the Press Association: "It's absolutely heartbreaking, it's devastating. It's a huge number of jobs, it's a huge number of livelihoods, but it is more than that to our community.

"Redcar was built on steelmaking, Teesside was built on steelmaking. It's about generations of people that have worked in that blast furnace and fought so hard, not just in the last few days but in the last few weeks, months, years, to keep steelmaking alive. It's just been allowed to fizzle out."

She called for the Government to take control of the site and its assets. "SSI have played fast and loose with us for weeks and months and the Government has got to get control. They cannot be allowed to run the asset into the ground.

"I don't believe this is a sustainable mothballing, I want to see the Government step in and take control of the asset so we have got a future for steelmaking on Teesside and in the UK."

Speaking at the Labour Party conference in Brighton, she added that SSI "have not treated the workforce fairly, they have not treated the local supply chain fairly", and also criticised the lack of Government intervention.

"I can't understand that things have been allowed to get to this stage, here we are, it's about to be driven off a cliff and no-one has been able to step in and do anything about it," she added.

Business Minister Anna Soubry said: "Despite everyone's recent efforts to help SSI this is very sad news and a big blow for the workforce and their families. They are the priority and, with SSI's difficulties being no secret, why I had already asked Amanda Skelton, chief executive of Redcar and Cleveland Borough Council, to chair a local taskforce to help support workers and the local economy. I also have concerns about reports that local contractors have gone unpaid.

"I hope that SSI's announcement that they are mothballing the furnace gives some hope that steelmaking could be restarted on Teesside in the future.

"The steel industry across the UK is facing very challenging economic conditions. The price of steel has almost halved over the past year, with over-production in the world market. While Government cannot alter these conditions, I have called a steel summit to see what more can be done to help our steel industry."

David Hulse, GMB national officer, said "This is absolutely devastating news for the workers, their families and the community. All that will be left operating will be the coke ovens unless the UK Government steps in even at this stage. It is not too late for them to do so while the furnaces are still burning."

Unite national officer Harish Patel said: "This is devastating news for Redcar and the thousands of people who depend on the steelworks for their livelihoods. Steel is the lifeblood of the local economy and runs through the community's veins.

"The Government's much vaunted Northern Powerhouse risks being nothing more than empty rhetoric unless it steps in with assistance to save the SSI plant on Redcar.

"With so many livelihoods at stake and the UK steel industry at crisis point Government ministers need to follow the lead of their counterparts in France, Italy and Germany by pursuing an active industrial strategy which supports the UK's steel industry."

TUC general secretary Frances O'Grady said: "Today's announcement is a massive blow to the Government's Northern Powerhouse agenda and British industry. There now needs to be a comprehensive, rapid response plan to help workers affected by the closure.

"The future of British steel-making is at a crossroads. At a time when competitor nations are spending heavily on helping their energy-intensive industries to become greener, companies in the UK are being forced to pay huge costs.

"The Chancellor must provide more financial support for manufacturers in November's spending review. If the Government does nothing plants like SSI will continue to close."

James Wharton, Conservative MP for nearby Stockton South and minister for the so-called Northern Powerhouse, tweeted: "Terrible news that SSI is to be mothballed. We must hope that when market picks up it can restart as it did in 2012 and support workers now."

Eugene Purvis, who has worked for SSI for eight years and as a contractor before that, said the decision would devastate the area.

Speaking outside the Redcar plant, the 56-year-old said: "I'm angry and it's because we've been let down, it's the North East of England being let down again. And I'm not just blaming this Government, it's been successive governments that have let us down.

"Redcar is in a bit of a state at the moment and if this place goes it will get worse, it'll devastate the area and that's the problem. I'm 56 going on 57, where am I going to get a job?

"I really don't get the Government who go to China to give them billions of pounds to build a power station and then give them £3m to teach them how to play football, I just don't get it.

"Without the steel works going back 160 years Middlesbrough wouldn't be here. Middlesbrough is steel.

"James Wharton needs to get his head out of the sand and see what's going on. It's all right for him saying we're in discussion but the work force want to know what he's actually doing.

"I would like to see him actually help the company with a bridging loan, but he talks the talk and doesn't walk the walk."

Teesside steelworkers won support from Labour's annual conference after hearing passionate calls for the Government to intervene urgently to save the plant.

Brian Dennis, who has been a steelworker for 26 years, told the Brighton conference he had learned he was one of those losing their jobs just months after his wife was made redundant.

"The Government must step in because steelworkers are facing the end of their industry and a bleak future. People have been calling me from the plant all day - young men with mortgages asking me for advice.

"Teesside has one of the highest unemployment rates in the UK, so I am sending a plea to David Cameron to save my community."

Anna Turley wore a t-shirt bearing a Save Our Steelworks slogan as she told the conference that 6,000 jobs on Teesside were at risk because of the number of workers who relied on the Redcar site. She accused the Government of not believing the steel industry has a future even though cuts could affect other parts of the country.

"France, Germany and Italy have all intervened to support their steel industry. It is a disgrace that an industrial marvel can be allowed to disappear into the sand."

Community's Roy Rickhuss said what was happening to the UK steel industry amounted to "industrial vandalism", bemoaning a "failure of political will" to save jobs. He noted that Chancellor George Osborne had visited China to invite companies to build railways in the UK when this country has plants capable of making the best railways in the world.

Shadow chancellor John McDonnell called on the Government to intervene to ensure the Redcar plant can be mothballed, to create a "breathing space" to plan for the future.

Mr McDonnell told Channel 4 News: "The Government has got to intervene. I'm really worried now that if we don't allow the mothballing to take place effectively - and that requires Government support - we are going to lose not just the 1,700 jobs, there are thousands of jobs in the supply chain in that area. It would absolutely decimate that area."

Mr McDonnell said that renationalisation should be "one of the options" on the table.

"It's a strategic Government role," he said. "We need to make sure there is resource available for mothballing, so that we can have a breathing space to plan the long term future for the steel sector in this country.

"That must include Redcar. I can't see that we can do without that sort of steel industry and that sector of the steel industry as we go into recovery."

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