UK steel jobs safe after multinational commits to plants

AP News
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Posted: Dec 07, 2016 12:57 PM
UK steel jobs safe after multinational commits to plants

LONDON (AP) — A deal between multinational Tata Steel and unions secured some 8,000 jobs across Britain on Wednesday in an agreement that ended months of uncertainty for steelworkers and their families.

Tata pledged to keep two blast furnaces operating for five years and to invest in the massive plant in Port Talbot, in south Wales. Compulsory redundancies will be avoided.

But pensions remain a sticking point and the unions say the revised pension plan remains "worrying." The company said the agreement is subject to the pension changes being accepted. It said it would start a consultation next week on a proposal to close the present pension plan and offer a defined contribution scheme.

"This proposal would secure jobs for years to come and bring serious investment not just to Port Talbot but to steelworks across the U.K.," said Roy Rickhuss, general secretary of the Community union. "Reaching this stage of the process is a credit to the hard work of our members, who never gave up the fight to 'Save Our Steel' — it was their jobs on the line and it has been their campaign that has brought Tata to this position."

The decision safeguards the future of a plant at Port Talbot in south Wales, which alone has some 4,000 jobs. The jobs had been in doubt since March when Tata Steel, based in India, announced plans to sell its U.K. operations.

The business was losing 1 million pounds ($1.4 million) a day due to high costs and a glut of cheap Chinese steel in global markets. That raised fears the plant would close if Tata couldn't find a buyer.

Over the summer, Tata announced it was talking to Germany's Thyssenkrupp about a potential joint venture in Europe and effectively halted the sale of its British businesses. Since then, the plant has become more efficient and market conditions have improved. In particular, the drop in the value of the pound following Britain's vote to leave the European Union in June has made Britain relatively cheaper for foreign investors.

While the problems of the steel industry may be global, they were distinctly local in Port Talbot, a community of about 45,000 people on a narrow strip of coastal plain abutting green hills. The 200-acre steelworks co-exists beside the rows of houses where generations of workers have lived.

The deal will be seen as a victory there — not just for the steelworkers but for thousands of members of the communities around the plants who banded together to create grassroots efforts to persuade Tata to rethink its plans to close its operations.

At Port Talbot, for example, union leaders met with dozens of reporters to tell them about their town and plant, underscoring how fundamental steel is to the economy. A Twitter campaign — #steelselfie — asked people to take pictures of themselves with something made of steel.

Other campaigns showed off things made with British steel, such as the Sydney Opera House and London's Olympic Stadium. Actor Michael Sheen, who is from the area, backed a petition to help workers.

Professor Dave Worsley, research director at Swansea University's College of Engineering, said he thinks those efforts made a difference to Tata.

"Christmas is just around the corner and this is terrific news to end what has been quite a difficult year," Worsley said, adding that promises of continued investment will keep the plant operating "for many Christmases to come."

But it's not over yet. Union members must still vote on the measures and representatives of the leadership said that the government would still need to do its part to help the deal happen.

"Today's news is a step forward, but the underlying challenges of illegal Chinese dumping, uncompetitive energy prices, inadequate procurement policies and the government's failure to come forward with a proper industrial strategy for steel still remain," said Stephen Kinnock, a lawmaker for the area.

The British government has said it is willing to take a 25 percent stake in any rescue of Tata.

Tata is Britain's largest steel manufacturer, supplying some 50 percent of U.K. carmakers' steel requirements as well as advanced steels for the construction industry.

"These are unprecedented times for the steel industry globally with multiple risks including global economic uncertainty, slow manufacturing growth and currency volatility which continues to present significant challenges to the business," said Koushik Chatterjee, the group executive director for Tata Steel.