Hundreds of steelmaking jobs cut
Tata Steel is to cut 400 jobs at one of its plants under restructuring proposals to "improve the competitiveness" of its steelmaking business.
The proposed changes at Port Talbot in South Wales will enable the UK Strip Products business to compete in Europe's "lower market demand era", with predictions that steel demand and prices will be under pressure for years.
Karl Koehler, Tata Steel's European chief executive, said: "We have invested more than £250 million over the last two years in state-of-the-art steelmaking technology in the Strip Products business. In addition, we are currently investing in our Hot Strip Mill in Port Talbot and we have upgraded our galvanising line in Llanwern enabling us to increase production of high-value automotive steels.
"These investments have created a stronger, more efficient and more reliable platform from which we can meet the needs of our customers, with an improved range and quality of products and services.
"But steel demand and prices are likely to be under pressure for some years. Our business rates in the UK are much higher than other EU countries' and our UK energy costs will remain uncompetitive until new mitigation measures come into effect.
"These proposed changes then are vital if we are to build a competitive future for our Strip Products business in the UK.
"We will, of course, engage fully with employees, trade unions and our political stakeholders during this restructuring process, and we will do everything we can to support our employees through this unsettling time."
Roy Rickhuss, who chairs the trade unions steel committee, made up of Community, Unite and the GMB, said: "We recognise the company has been dealing with a long-term downturn in European steel markets for more than five years. However, we have also expressed our own concerns about possible undermanning within Strip Products and in Port Talbot in particular.
"Therefore, it is vital that this is not just an exercise to just reduce costs by cutting jobs but takes a considered and objective view as to the numbers required to run and maintain the plant to make steel safely and productively.
"This news also demonstrates that despite the Government's trumpeting of economic recovery, the steel sector remains under real pressure. This sector, vital for so much of British manufacturing, must be an area of real focus for the UK's industrial policy.
"We will be seeking an urgent meeting with the company to discuss our concerns about manning levels and reiterate our opposition to any compulsory redundancies."
Hridayeshwar Jha, director of Strip Products UK, said: "This business has achieved some notable technical and engineering successes in recent years. We have introduced new high-value products for customers and we have proved we can produce reliably.
"But we need to improve our competitiveness and flexibility in a tough marketplace to help us further develop a sustainable steel industry in Wales. Today's proposals include a review of all our activities in manufacturing, engineering, technical and the support functions.
"We will be striving to achieve any redundancies voluntarily."
Business Secretary Vince Cable said: "This is understandably a difficult time for the workforce at Tata Steel in South Wales as the company tries to weather challenging market conditions.
"I have been in close contact with the chief executive at Tata Steel and understand they will offer voluntary redundancy packages and cross match people to other parts of the business to try and avoid compulsory job losses.
"The company is committed to the UK and is making significant new investments to ensure it is able to meet new challenges and opportunities."
Secretary for State for Wales David Jones said: "It is very disappointing to hear that Tata Steel has had to make the decision to reduce its operational workforce at its Port Talbot site and my immediate concerns are with those employees and their families who may be potentially affected by redundancies.
"Tata Steel has assured me that it is undertaking a robust consultation process with its staff and will continue to work very closely with the unions. It has also offered assurance that it is committed to sustaining the long-term future of its Port Talbot site in Wales against a global backdrop in recent years of shrinkage in the steel industry and intense global competition. Jobcentre Plus stands ready to support any employees potentially affected by today's announcement."