Thursday, July 16, 2015

News: Tata Steel announces speciality steel restructure - hundreds of Rotherham jobs affected

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720 jobs are at risk, many in Rotherham, as Tata Steel, the Indian-owned steelmaker, announces plans to restructure its speciality and bar business.

Investment in 2005 saw the Rotherham site at Aldwarke become the focus for steel making, casting and rolling of specialist steels. The steel is manufactured at the Rotherham site before undergoing further refining at the Stocksbridge plant or the Thrybergh Bar Mill to improve the quality.

Restructuring in 2012 saw the Bar business integrated into its Speciality Steels business when Tata Steel announced that it was investing a further £2.75m in the Rotherham site.

Announced, today, the next stage in its plans to refocus its speciality and bar business on high-value markets such as aerospace includes changes that would result in a reduction in employee numbers, mainly at its Rotherham-based bar business. Tata said that the bar business in Rotherham has been "underperforming in the face of commodity-grade steel being imported to the UK due to the strong pound and high electricity costs which are more than double those of key European competitors."

In a statement, the company said that it had identified 720 positions which will potentially become redundant but that it will work closely with those at risk and their trade union representatives to redeploy employees and minimise the number of compulsory redundancies.

Karl Koehler, chief executive of Tata Steel's European operations, said: "We have invested more than £20m in recent years in our speciality steels business. These investments have created a stronger and more technically advanced platform from which we can meet the needs of our customers, with an improved range and quality of products and services.

"However, energy is one of our largest costs at our speciality and bar business and we are disadvantaged by the UK's cripplingly high electricity costs. And while the UK Government announced helpful measures to reduce the impact of its high energy taxes a few years ago, these measures still haven’t been introduced.

"We want to play our role in reinvigorating the UK's manufacturing industry, but increasing imports and high energy costs have further undermined the competitiveness of foundations industries."

It is another recent blow for Rotherham with Tata Steel set to relocate all its UK-based research and development within two years, including moving away from the Swinden Technology Centre (STC) in Rotherham.

Over 2,000 people are employed by the company in South Yorkshire and operations in Rotherham include Aldwarke and Brinsworth. A cost saving and restructure programme saw the company, then known as Corus announce in 2009 that 1,100 jobs would be lost in Rotherham. Over 100 jobs were under threat of redundancy in the 2012 restructure which included plans to reduce its production and shift levels in Rotherham.

Roy Rickhuss, General Secretary of the Community Union, said: "This will be devastating news for our members across South Yorkshire. This is a business that has seen a lot of restructuring and change over recent years and another round of potential redundancies will hit the workforce hard. It will be natural for workers to be sceptical about this plan too as commitments given by the same management team in previous restructurings have not been delivered.

"We will give our members every support in the coming weeks and months and will oppose any compulsory redundancies. We will also engage independent experts to study Tata Steel's proposals and look at alternatives that could save jobs and create a sustainable business. It's only right and proper that Tata Steel allows sufficient time for that work to be carried out.

"While we still need to study the full rationale behind today's announcement, it is clear the UK steel industry is in a perilous state and as the biggest producer, Tata Steel is particularly affected. There is already a case for government action. We have been saying for years that uncompetitive UK energy costs are damaging the UK steel industry. The electric arc furnace operations in Rotherham have been impacted by higher electricity prices. The government needs to stand up for steel and take urgent action to support energy intensive industry while there is still chance to save the jobs at risk."

Stuart Sansome, Community National Executive Councillor and Chair of the multi-union committee at Speciality Steels, added: "This is a smack in the face for the workforce who have given everything and more to see the business survive and grow. Since 2009 the business will have gone through three restructurings, which if this proposal goes through, will have seen the loss of 2,500 jobs.

"There have been too many promises made to the workforce that have then been broken by management, which makes today's news all the more damaging to morale. Although our faith in the way the business is being run has been destroyed, our belief in the workforce to deliver is unshaken and so we will be doing all we can to save jobs, hold the company to account and secure a future for speciality steel making."

Tata Steel website

Images: Tata Steel

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