British Steel plans to improve its Special Profiles business with a view to strengthening its competitive position through sales growth, further investment and cost reduction –at the expense of losing up to 70 jobs.
The plan will affect the Skinningrove site on Teesside and the Darlington facility in County Durham where components for earth-moving equipment are manufactured.
British Steel boasts that it will spend £1.8 million over the summer at both plants and plans further investment to introduce automation to the production process; that’s the good news. The bad news is that jobs are on the line.
“This strategy is the one we feel best suits the future needs of our business and our customers. That is why we remain committed to spending nearly £2 million on state-of-the-art descaling technology to further improve the surface quality of our products,” said Peter Gate, British Steel’s managing director for its Special Profiles division.
He said the company was ‘striving to become a global leader in special profiles’ but had to be more flexible and more efficient too.
“The proposed plan seeks to reduce the number of positions in the Special Profiles business by up to 70 over the next two years,” said Gate.
“We will be working closely with our unions to determine how we reduce our overheads, including employment costs,” he added.
Prior to the launch of British Steel last year, the Special Profiles business hadn’t been profitable, Gate said, but now it was time to be ‘even more competitive’.
“Our proposals will enable us to not only continue meeting the exacting demands of the market place, but exceed them by continually improving the quality of our products and customer service.”
As for the job losses on the way, Gate said that British Steel plans to provide ‘all the support needed’ to those affected and will work with its other sites in the region to minimise the impact on employees.
Up to 20 opportunities have been identified at the company’s Teesside Beam Mill plant in Lackenby in the UK and it is hoped that some employees will consider transferring.
British Steel’s Special Profiles investment is part of a wider £39 million package of capital investment across the business during its first 12 months of ownership. In this time, more than 350 new people have joined the wider company.
The company claims that the previous loss-making long products business has been transformed into one making consistent profit and British Steel managing director, Paul Martin, said: “While we have pledged nearly £40 million of capital investment and welcomed hundreds of new people to the business, there are still many challenges.
“We are continually looking at new ways to develop and grow our business. We’re not proposing job losses in any other areas of the business and we passionately believe we can build a sustainable future for British Steel.”
Products manufactured at Skinningrove and Darlington include crane rail (developed for overhead gantry and floor-mounted cranes in ports, warehouses and shipyards), track shoes (for excavators and diggers) and wear-resistant steel for use in underground and surface mining operations.
The Special Profiles business employs 331 people, including 24 at Darlington.