Tata Steel's Long Products business announces restructuring proposals on 29 October to help strengthen its competitiveness. The proposed changes affect predominately management and administrative functions at sites in UK at Scunthorpe, Teesside and Workington and could lead to the loss of around 500 jobs.
About 340 positions could be affected in Scunthorpe, 90 in Workington and 40 in Teesside.
The proposals come amid a prolonged downturn in demand for some of the key products made by the Scunthorpe-based business, including the UK market for construction steel, which is about half that of 2007 levels.
Karl Koehler, CEO of Tata Steel’s European operations, said: “European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years…… On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry.”
Jon Bolton, Director of the Long Products operations, said: “UK demand for construction steel has fallen further since we launched an improvement programme at our Long Products business in 2011. This further market decline means we must now build on the work we have been doing to restore Long Products’ ability to compete throughout the economic cycle.”
“The proposed changes at our Workington engineering operations, meanwhile, are as a result of a shortfall in external projects.”
Karl Koehler emphasised that Tata Steel will engage fully with employees, trade unions and political stakeholders during this restructuring process to support employees through this unsettling time.
Michael Leahy, General Secretary of Community and Chair of the UK Steel unions' Committee said: "We are obviously very concerned to hear this news and are doing all we can to support those affected by the announcement. We recognise the business has been dealing with a downturn in some of its markets for the past five years. Nevertheless, today's news once again reflects the fragile state of our economy and the lack of any real impetus by government to support our manufacturing base.
Unite national officer Paul Reuter comments: "Just last year Tata steel announced 1000 job cuts and now the company is coming back for more. Tata Steel is trying to sack its way out of a downturn rather than thinking strategically about selling steel and looking at the long-term.
Tata Steel’s subsidiary UK Steel Enterprise will look at how it can provide more support to the local communities affected by today’s announcement and help stimulate new job creation in those areas. UK Steel Enterprise has regeneration teams in North Lincolnshire and the North East. Over the past four decades the company has helped to regenerate local economies with £85M of support and created 75000 new jobs across the UK.
A consultation process will begin soon with affected employees and their representatives.
The company will make every effort to achieve the job losses through voluntary redundancies, though it is important that critical skills are retained. A comprehensive range of redundancy packages and outplacement support services will be made available to those leaving the company.