Thousands of workers at Britain’s biggest steelworks in Port Talbot have been left in limbo after the plant’s owner delayed an announcement on job cuts that was expected to cause as many as 3,000 posts to be lost from the UK workforce.
The Welsh town, which grew up around the steelworks, had been braced for confirmation of the closures of the two blast furnaces after a meeting of the Tata Steel board on Wednesday, in what would have marked the beginning of a major retrenchment in UK steelmaking.
However, in a last-minute change of tack Tata cancelled a press conference and said it would not be releasing a statement on its plans. The company did publish financial results, showing a £135m loss in the three months from July to September, a deterioration on the previous quarter, despite a fall in raw material costs.
It is understood union representatives discussed the job cuts with Tata on Wednesday but no final decisions have been made by the company. Union sources said the cuts could come as soon as March, but Tata has not confirmed this.
Charlotte Brumpton-Childs, national officer at GMB trade union, said workers expected “a full and meaningful consultation before any detailed plans are announced”.
She said the unions would “offer a viable and reasonable alternative” that safeguarded jobs and created a “genuinely ‘just’ transition”.
Workers have been left in the dark over the reasoning and whether Tata is likely to make an announcement or not in the coming days or weeks. The Indian conglomerate was reported in September to have secured a £500m investment from the government to convert its coal-powered blast furnaces to more environmentally friendly electric arc technology.
A Tata Steel spokesperson said: “Despite today’s press commentary, we are not in a position to make a formal announcement about any proposals for a transition to a decarbonised future for Tata Steel UK.
“We hope to soon start a formal information and consultation process with our employee representatives, in which we would share more details about any such proposals.”
It is understood the company is examining how many employees it will need in the four years it will take to bring the electric arc into production, and that parts of the site could be mothballed.
The cuts are expected to impact as many as 3,000 workers, with the majority coming at Port Talbot, where the company employs 4,000 people. Tata Steel has 8,000 employees in the UK overall.
Port Talbot’s two coal-powered furnaces alone account for about 1.8% of UK emissions. The new technology requires fewer workers, and the investment was expected to be accompanied by significant job cuts.
Workers are hoping that the company may be considering options put forward by the unions rather than closing the blast furnaces. However, any permanent reprieve would come as a surprise, as Tata executives in Port Talbot had got as far as preparing initial plans for the closure, and unions had been given detailed briefings on how it would unfold.
The UK’s four blast furnaces are split between Tata’s site in Port Talbot and British Steel’s Scunthorpe plant, which is owned by the Chinese steel company Jingye. Both companies are under pressure to shift production away from methods that produce carbon dioxide, removing the need for the furnaces which dominate the skylines of both towns and require thousands of workers to keep burning.
The job cuts are also a consequence of the decline in demand for UK steel. In Scunthorpe, where British Steel is suffering losses of as much as £30m a month, Jingye was reported to be considering cutting nearly half of its 4,500 workforce as part of its shift to electric arc.
With the technology change, the UK will also lose its capacity to make iron from raw materials at any significant scale. Electric arc furnaces can only be used with recycled steel, whereas blast furnaces can turn iron ore into steel.
Tata is expected to inject about £725m to help the move to greener production methods.
The scale of the possible job cuts first emerged last month, and bosses at Tata Steel met union representatives in London to discuss the timeframe soon after.
The unions are working with Syndex, a consultancy, on an alternative plan to allow Port Talbot’s blast furnaces to stay open while the upgrades are carried out. However, it remained unclear on Thursday whether Tata was seriously considering keeping the blast furnaces operating. Tata Steel is losing about £1m a day in the UK, as the steel market struggles with a global recession.
