Engineering news
Steel firm Caparo is set to become the next victim of the UK steel crisis and is poised to go into administration, putting 1,800 jobs at risk.
According to reports the London-headquartered business, which operates from about 20 sites across the UK, is due to file for administration this afternoon as pressure on the steel sector intensifies. Approximately 80% of Caparo’s workforce is based in the West Midlands.
Britain’s largest union, Unite, warned of a ‘domino effect’ in the steel industry, as it renewed calls for the government to urgently step in to support the steel industry.
Described as a yet another ‘hammer blow’ for steel and manufacturing communities across the UK already reeling from the closure of SSI's Redcar plant and job losses at Tata steel. Unite vowed to do everything in its power to protect jobs and skills at Caparo Industries and the wider steel industry.
Tony Burke, Unite assistant general secretary for manufacturing, said: “Government ministers need to ask themselves. How many more steel firms need to go to the wall before they step in and support the UK’s steel industry?
“Failure to act urgently could lead to a ‘domino effect’ taking hold across the industry, leading to the loss of yet more skilled jobs as firms buckle under a combination of steel ‘dumping’ and high energy costs.
“The government’s ‘March of the Makers’ and ‘Northern Powerhouse’ will become meaningless rhetoric, if it fails to act swiftly and the livelihoods of thousands of people left in tatters.”
Roy Rickhuss, general secretary of Community, the steelworkers’ union, added: “This news is a tragic reminder of the urgent need for government action to help our steel industry survive. Crippling energy costs and the dumping of cheap Chinese steel is threatening the very future of the UK’s steel sector.”
Caparo's news follows urgent calls from Britain’s steelmakers urging the prime minister to raise the issue of the dumping of under-priced steel with the Chinese premier during his visit to Britain this week.
According to UK Steel, the price of Chinese steel has been consistently below market rates with an excess capacity in 2014 of 340 million tonnes, more than double the EU’s annual steel demand of 155 million tonnes.
Gareth Stace, UK Steel director, said: “If the worst is confirmed with further job losses in the steel industry, I would hope the prime minister would use the opportunity of this week’s visit to raise the issue of Chinese dumping of steel. As well as reinforcing the need for the EU to tackle unfair dumping of steel across Europe, Mr Cameron’s intervention would send a powerful signal to Beijing that he is prepared to stand up for British steelmakers.
“If the prime minister can make headway on this, and the business secretary can act quickly to tackle spiralling energy costs by compensating the industry for the various levies that penalise it, we may start to give the steel industry some confidence that the government is supporting it before it’s too late.”