Tata: Hundreds of steel jobs could go at Newport plant

Cogent in Newport

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Up to 380 jobs could be lost at the plant

Hundreds of jobs could go at a steelmaking factory in Newport after its owner announced it was shutting part of its operations.

The steel giant Tata is closing its Orb Electrical Steels base in the Pill area of the city.

Up to 380 jobs could go from the plant, which makes electrical steel used in power transmission for vehicles.

The company has been for sale since May 2018 as Tata had decided to concentrate on its core steel production business.

Tata Steel’s European operations head Henrik Adam said: “I recognise how difficult this news will be for all those affected and we will work very hard to support them.”

BBC Wales has been told the 380 workers can be redeployed at its Welsh plants.

Unions said Tata – which employs nearly 6,000 workers in Wales – was breaking its commitments over job guarantees.

Orb Electrical Steels is part of Tata’s Cogent division, part of which is being sold to the Japanese steel company JFE Shoji Trade Corporation.

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Tata said it would have cost £50m to upgrade the Orb site to make it competitive

The Orb site has been struggling to compete, while converting it would have cost more than £50m.

Tor Farquhar, Tata Steel Europe’s HR director, told BBC Wales the business had been suffering from over-capacity over the last 10 years, with competition from big volume producers in China.

“This business is the smallest volume electrical steel manufacturer in the world – and we’ve only been able to make a profit in two of the last 10 years and no profit in the last four years,” said Mr Farquhar.

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.”

Roy Rickhuss of the Community steelworkers’ union called it “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 in the way this has come about,” he said.

“This is of course extremely devastating news for workers at the Orb, but all Tata Steel workers should be concerned by the way Tata is breaking its commitments.”

He called for government intervention.

Unite’s Tata official Tony Brady said Orb’s closure would be a “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.”

He said the union would not sit back and allow “decent well paid jobs and irreplaceable skills to go to the wall”.

Mr Adam said workers would be offered alternative employment at other Tata sites where possible and consultations with staff and unions would start shortly.

Tata is also closing its Wolverhampton Engineering Steels service centre, with up to 26 jobs at risk.

There has been steelmaking on the Newport site since 1898, when the old Lysaght company moved from Wolverhampton.

The famous city landmark, the transporter bridge, was built to carry workers across to the works.

It eventually became part of British Steel and then European Electrical Steels in 1991.

Analysis by Brian Meechan, BBC Wales business correspondent

There have been concerns for the future of Tata’s Cogent operation for a few months, ever since it was put up for sale.

Cogent had been put up for sale by Tata in May last year after the Indian owners had decided to concentrate on its core steel production business, as it planned to merge with the German company Thyssenkrupp.

Given Cogent’s specialism, it was hoped that a buyer could be found, but unions said at the time they were not persuaded by the case for a sale.

They had privately been growing increasingly concerned about the future of the plant. This decision could set Tata and the unions on an even bigger collision course.

As part of the unions’ agreement to support less generous pensions, they believe Tata committed to no compulsory redundancies until 2026.

Tata has always maintained that it committed to try to avoid compulsory redundancies.

Unions could see this as breaching a commitment to its entire Welsh workforce, and industrial action could be possible, they say.

Economy Minister Ken Skates said he stressed the importance in talks with the company of avoiding compulsory redundancies.

“The Welsh Government will now do everything it can to support individuals, the community and the supply chain affected by this announcement,” he added.

“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.”

Newport East MP Jessica Morden said job losses would be “devastating news” for workers and families. 

“What is particularly tragic is that this the only UK plant with the potential to produce electric steels for motors and with investment, vision and government backing this could be the key part of the supply chain for electric vehicles,” she said.

Plaid Cymru’s economy spokesman Rhun ap Iorwerth AM said the closure was “devastating” and he wanted the Welsh and UK governments to investigate all possible interventions.

“I’ve repeatedly called for a major summit on Wales’ economic future,” he said.

“This is further evidence of why it’s more important than ever to have the clearest possible focus on the threats facing us, and the opportunities that need to be sought out at this time of unprecedented uncertainty.”

Conservative business minister Russell George AM, called the news “incredibly disappointing” and “a terrible blow to the region and its supply links”.


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