Tata Steel is to cut as many as 250 jobs at Llanwern in south Wales, leading to warnings that the future of the industry in Britain is under threat.
The Indian-owned company has told staff that it plans to scale down production in the face of fierce competition from China. It said none of its own permanent employees at Llanwern would lose their jobs and declined to say how many agency staff were at risk.
Unions, however, predict that 250 jobs will be axed, on top of the 720 full-time staff already facing redundancy at Tata’s plant in Rotherham, South Yorkshire. The firm cut 400 jobs at its Port Talbot site in south Wales last summer.
“Surging, and often unfairly traded, imports have combined with a strong pound to create a very challenging business environment,” said Stuart Wilkie, the director of Tata Strip Products UK.
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“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.”
Dave Hulse, the GMB union’s national officer, said there were genuine concerns about the future of the steel industry in the UK, which he partly blamed on rising energy costs.
“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,” he said.
“Energy-intensive industries need access to affordable and secure energy. 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.”
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His remarks echo concernsfrom Tata when it revealed the Rotherham job cuts in July.
Roy Rickhuss, the chairman of the National Trade Union Steel Coordinating Committee, said the strength of the pound and a flood of Chinese imports were also killing the industry. “It’s tragic that these young people, who have been trained up by Tata and in normal circumstances would be considered the future of the business, are being let go in the drive to cut costs and remain competitive in the global marketplace,” he said.
It is only a few months since the Unite union balloted its 6,000 members at Tata Steel over its plan to close the British Steel pension scheme, but the two sides eventually reached a peaceful settlement.
When it announced its first quarter results last month, Tata blamed “surging EU imports, especially from China, and, in the case of the UK operations, the appreciation of sterling against the euro,” for a drop in profits.
It signalled that it was planning to take significant steps to cut costs: “The company is combating these headwinds by progressing its market differentiation strategy, improving its cost base and shifting focus increasingly from volume to value.”
Source: .The Guardian.