Hundreds of jobs are at risk in Newport as Tata looks at closing a specialist steel-plant. Up to 380 people could face losing their jobs as they plan to close the Orb Electrical Steels.
In 2018, the company looked at potentially selling five ‘non-core’ businesses, one of which was Cogent Electrical Steels – that’s made up of 3 branches including the Orb plant in Newport.
According to Tata, the steelmaking factory has been ‘loss-making for several years’ as it struggled to compete with its rivals.
Plans to change the site to create steel for future electric vehicle production instead of steel for electricity transformers was shelved due to the projected cost of over £50 million.
Today, they announced that they were ‘unable to find a way forward’ and says they’re closing the site – risking 380 jobs at the Pill area of the city.
The CEO of Tata Steel’s European Operations, Henrik Adam, says they did manage to find a future for the two other branches of the umbrella Cogent Electrical Steels branch however.
“We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks,” he said.
“However, 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, helping us build a long-term sustainable future in Europe.”
“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.”
A spokesperson for the company denied the closure is connected to uncertainty over Brexit, citing instead the growing pressures of international competition.
Tata will now seek to minimise the number of compulsory redundancies by looking to secure jobs for some of the workforce at other Steel sites. They say they’ll consult with affected employees and unions shortly.
“I recognise how difficult this news will be for all those affected and we will work very hard to support them,” Henrik added.
Employing around 6,000 in Wales, the Union that represents steel workers, Community, says they’ve broken the promise they believe Tata made to avoid compulsory redundancies until 2026 when they merged with ThyssenKrupp in 2018.
“This is of course extremely devastating news for the workers affected, but all Tata Steel workers should be concerned by the way Tata is breaking its commitments,” Roy Rickhuss, the General Secretary of Community said.
“We are opposed to plant closures and compulsory redundancies and therefore the company should be aware that we will be considering all options, up to and including industrial action, in defence of our members’ livelihoods.”
“We also call on the government to intervene. Ministers were closely involved in securing commitments from Tata over the future of the business.”
“At a time when the government wants to decarbonise the economy and support a switch to electric vehicles, losing the UK’s only producer of electrical steels would be a grave error.”
Meanwhile, another union, GMB, says not much will be done until after Brexit.
“Until this Government puts jobs and industry before internal party bickering over Brexit – we’re likely to see more proud British Industries go to the wall.”
Minimise job losses
Responding to the potential closure, Welsh Economy Minister, Ken Skates says he’ll try to minimise any job losses and reiterated the importance of steel to the Welsh economy.
“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,” he said.
“The steel industry is of great importance to the Welsh economy and of national strategic significance to the UK as a whole.”
“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.”
Shadow Business Minister, Russell George AM, said:“It’s incredibly disappointing to hear of yet another case of potential job losses in South Wales.
“380 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. I urge the government too to ascertain any other contributing factors in order to stop this spread of business strife in this busy and prosperous part of Wales.
“My thoughts are with worried staff and their families during this time.”
Plaid Cymru shadow minister for the economy Rhun ap Iorwerth AM commented:
“This really is devastating news for the workforce and their families, and its 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.
“I’ve repeatedly called for a major summit on Wales’s economic future. 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.”
“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.”