Steel closure body blow to the Welsh economy
STEEL giant Tata is to close the Orb Electrical Steels plant with the loss of 380 jobs in another blow for the Welsh economy.
The steel giant said it has been “unable to find a way forward” for the future of the Newport site.
Orb is part of Tata’s Cogent Power Inc, which was was one of a number of businesses Tata had designated as “non-core” and announced last year that it was seeking buyers for.
Cogent Power Inc includes Cogent Power in Burlington, Canada, and Surahammars Bruks AB, in Surahammar, Sweden. Tata is now retaining Surahammars Bruks AB, which makes advanced steels for electric vehicles and employs around 100 people. The Canadian business is being sold to Japanese steel giant JFE Shoji Trade Corporation.
But Tata said it “had been unable to find a way forward for Orb Electrical Steels and so proposes to close the site, with the potential loss of up to 380 jobs”.
Orb is based in Pill, Newport, where there has been steelmaking since 1898.
Henrik Adam, CEO of Tata Steel’s European operations, said: “Today’s proposal will be sad news for colleagues at Orb in south Wales. This is necessary, enabling us to focus our resources, including investment, on our core business and markets.”
Roy Rickhuss, general secretary of the steelworkers’ trade union Community, said: “This is shocking news, which makes a mockery of the understanding we reached with Tata around the jobs guarantee. There has been no consultation about this proposal either at UK or European level and company management should hang their heads in shame.”
Tata insisted Orb Electrical Steels has been loss-making for several years as it struggled to compete in the market to supply steels used in electricity transformers, in which customer requirements have outstripped the site’s capability.
Tata said that converting the site to create steels for future electric vehicle production would cost in excess of £50m.
Mr Adam added: “Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges. We saw no prospects of returning the Orb business to profitability in the coming years. I recognise how difficult this news will be for all those affected and we will work very hard to support them.”
Ross Murdoch, national officer of the GMB union, said: “This is a bombshell for the people of Newport and yet another disaster for UK manufacturing. GMB will fight hard for every member’s job in the UK steel industry.”
Economy Minister Ken Skates said: “This is extremely disappointing news. I have spoken with Tata and made clear the importance of avoiding compulsory redundancies where possible. The Welsh Government will now do everything it can to support individuals, the community and the supply chain affected by this announcement.
“Today’s news clearly demonstrates the fragility of the global steel market and the UK Government must now step up and broaden its approach to supporting the industry, including its supply chain, across the whole of the UK.”
Labour MP for Neath and Shadow Secretary of State for Wales Christina Rees said on Twitter: “The loss of these highly skilled jobs is a devastating blow for the South Wales economy and underlines the need for a proper industrial strategy from the UK Government. I know that the Welsh Government will do all they can to support the workers, their families and the businesses and communities affected by this dreadful news.”
Plaid Cymru Shadow Minister for the Economy Rhun ap Iorwerth AM said: “This really is devastating news for the workforce and their families, and it’s terrible news for steel-making and the wider economy of Wales.
“Orb is a specialist steel-maker, which could be a major contributor to potential emerging industries in Wales, including renewable energy and electric vehicle production... Plaid Cymru is asking Welsh and UK governments to investigate all possible interventions – from joint investment to even taking it into public ownership, such is the importance of keeping this specialist capability.”
Plaid AM for South Wales East Delyth Jewell added: “The Welsh Government needs to do all it can to try to save these jobs and should consider taking the plant into public ownership, as the specialist products the plant produces could play an important role in the development of the strategically vital renewables sector in Wales”
Trade union Unite’s officer for Tata Steel Tony Brady said: “The closure of the Orb electrical steel base in Newport is yet another body blow for the economy of Wales.
“Unite will be fighting for every job and holding Tata Steel’s feet to the fire over assurances that workers affected by today’s announcement will be redeployed.“
Newport East Labour Jessica Mordern MP said: “This is devastating news for the highly-skilled workforce and their families. The Orb steelworks has been at the heart of the Newport community since 1898. It was totally unacceptable that many heard this through the newspapers yesterday.”
Conservative Shadow Business Minister Russell George AM said: “Three hundred and eighty job losses in Newport would be a terrible blow to the region and its supply links, and it would make Orb Electrical Steels the latest victim of business difficulties along the M4 corridor.
“The Welsh Government must be very clear about whether its delay to address congestion and transport problems along this road has had anything to do with Tata’s decision.”