Engineering news
Tata Steel is set to cut up to 250 jobs as the company mothballs one of its sites in South Wales.
The company today told employees at its South Wales-based Strip Products business of the need to reduce costs and focus on manufacturing higher-value products. It will concentrate UK production of hot rolled coil at its hot strip mill in Port Talbot which has benefited from quality and capacity upgrades.
As a result, some coil processing facilities including the sibling hot strip mill at Llanwern, Newport, will come out of production but will be retained so they can be restarted in more favourable market conditions. The higher-cost Llanwern mill has ramped up and down on two occasions since 2009.
The company said employees at the Llanwern mill will be redeployed within the business.
Stuart Wilkie, director of Strip Products UK, said: “Tata Steel has invested upwards of £350 million to improve the steel industry in Wales in the past five years. In the teeth of a recession we rebuilt a blast furnace, improved the Port Talbot hot strip mill and upgraded the capabilities of our world-class galvanising line at Llanwern. We also built new steel processing technology at Llanwern – a site which will continue to specialise in finishing and distributing our steel products.
“In the past year, we have also been making positive improvements to our manufacturing capability and in developing higher-value new steel products for customers.
“But surging, and often unfairly traded, imports have combined with a strong pound to create a very challenging business environment. The changes we have told employees about will reduce our costs and enable us to focus on generating more value from our products, which will improve our competitiveness.
“We need to concentrate more on sales of differentiated products to key sectors including automotive, engineering, construction, packaging and consumer goods.”
The GMB union is seeking a meeting with prime minister David Cameron in light of the announcement.
Dave Hulse, GMB national officer, said: “This is more bad news for the steel industry. This comes on the back of the recent announcement that 720 jobs will go in the Speciality Business. The 250 jobs to go will be drawn from agency workers who are currently employed at Tata Steel sites.
“There are genuine and well founded concerns over the future of the steel industry in the UK. GMB will propose that the Trades Unions Steel Committee write to prime minister David Cameron requesting a meeting to discuss these concerns over the long term future."
Hulse added: “We will see local communities destroyed with mass unemployment while the balance of payment deficit will increase further if we don't act now and get government support and action.
“Government must ensure competitive tariffs for large scale power users so that the push for low carbon does not drive heavy industry out of the UK. Unless government acts what's left of the steel industry will be at risk."
Last month Tata Steel proposed 685 job cuts for two plants in Rotherham and Stocksbridge in South Yorkshire and 35 job cuts at Wednesbury in West Midlands. Those job losses are proposed for end March 2016.