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Steelmaker dismisses North-East job fears after Wales move
1:07pm Tuesday 1st July 2014 in Business News
JOB ANNOUNCEMENT: Workers pictured at Tata Steel's Hartlepool pipe mill. The company says job cuts in Wales will not affect its plants in the region
A STEELMAKER has quashed fears plans to axe 400 Welsh jobs will affect its North-East plants.
Tata Steel is cutting posts at Port Talbot, where it makes steel coil for the car industry.
Bosses say the move will reduce costs as it battles against sluggish market demand, predicted to last for years, high UK business rates and rising energy costs.
However, the company told The Northern Echo the changes will have no impact on its North-East operations, where it employs about 1,500 workers.
Tata, the UK's largest steel producer, has plants in Redcar, Hartlepool and Skinningrove, east Cleveland, and says it has invested £250m in its Welsh strip products business.
It sends thousands of tonnes of coil to Middlesbrough distribution firm AV Dawson, which is stored and delivered to Sunderland’s Nissan for use on new cars to improve fuel economy.
Last year, Tata, which employs about 4,000 workers at Port Talbot, revealed its highest European production levels for five years.
Karl Koehler, the firm’s European chief executive, said it had been forced to react to market pressures.
He said: “We have invested more than £250m in steelmaking technology in strip products and are investing further to increase production of high-value automotive steel.
“These have created a stronger, more efficient and more reliable platform to meet customer needs and improve quality.
“However, 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 are vital if we are to build a competitive future for strip products in the UK.
“We will do everything to support employees through this unsettling time.”
Tata’s Teesside beam mill, in Redcar, rolls and finishes construction steel sections, with its Hartlepool pipe mill supplying steel for energy projects, and its factory in Skinningrove, east Cleveland, providing steel for earthmover track shoes.
However, Roy Rickhuss, chairman of the UK trade unions' steel committee, said its move in Wales highlighted the overall UK steel industry remained a difficult environment.
He 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 under-manning of its plants.
“Therefore, it’s vital this isn’t just an exercise to just reduce costs by cutting jobs, but is a considered and objective view on the numbers required to run and maintain the plant to make steel safely and productively.
“This also demonstrates despite the Government's trumpeting of economic recovery, the steel sector remains under real pressure.
“This sector, vital for so much of UK manufacturing, must be an area of real focus for the country's industrial policy.”