Tata Steel is cutting almost 500 jobs blaming a fall in demand across the European construction industry and the burden of green levies. Announcing the cuts, the company and union representatives called on the government to do more to support the steel industry.
Tata steel works, Scunthorpe
About 340 jobs are under threat in Scunthorpe, Lincolnshire, where Tata employs 4,000 workers. Almost a third of the 300 staff at Workington in Cumbria will be made redundant and 40 jobs in Teeside are also at risk, where Indian-owned Tata, which owns what was formerly British Steel, employs 1,500 workers. The cuts come less than a year after 900 steel job fatalities, mainly in Port Talbot, Wales. Tata said then that the cuts were part of a strategy to deal with the terrible market conditions.
Tata Steel’s European chief executive, Karl-Ulrich Köhler, said; “European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the last two years. On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs.”
The financial crisis aggravated overproduction in the European steel industry. China’s rapidly growing capacity has also pushed up the price of iron ore, the sector’s main raw material, while putting downward pressure on the cost of steel.
Eurofer, which represents the steel industry, predicts that steel consumption will fall by 4.5 per cent this year in Europe with only 0.5 per cent growth expected in 2014.
Europe has emerged from its long recession but growth is still slow-moving and manufacturing is picking up in the UK, though from a low base. Tata said steel is one of the last industries to take advantage from economic recovery because customers can use stockpiles left over from the boom years before buying more.
Community’s general secretary, Michael Leahy, said the news reflects the fragile state of the economy and a lack of impetus from the government to support UK manufacturing.
The union called on the government to produce a plan to support industry, including giving businesses incentives to use UK steel rather than cheap imports for large infrastructure and building projects.
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