Tata Steel axes 720 jobs in UK

17 Jul 2015

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Indian steel making giant Tata Steel Ltd has announced 720 job cuts in its UK plants blaming ''cripplingly high electricity costs'' in that country.

 
Tata Steels' Rotherham Works at Yorkshire  

Most of the jobs will go from the group's Rotherham Works in South Yorkshire, while 35 positions will be from its steel operations in the West Midlands.

Rotherham's bar-making unit ''has been underperforming in the face of commodity-grade steel being imported to the UK due to the strong pound and high electricity costs which are more than double those of key European competitors,'' the company said in a statement yesterday.

The steel maker plans to refocus on high-value markets such as aerospace and energy, moving away from traditional steel bar business.

Tata Steel Europe chief executive Karl Koehler said, ''Energy is one of our largest costs at our specialty and bar business and we are disadvantaged by the UK's cripplingly high electricity costs.''

''And while the UK Government announced helpful measures to reduce the impact of its high energy taxes a few years ago, these measures still haven't been introduced,'' he further stated.

"We want to play our role in reinvigorating the UK's manufacturing industry, but increasing imports and high energy costs have further undermined the competitiveness of foundations industries," Koehler said.

Tata Steel said it is working closely with those at risk of losing their jobs and trade unions.

''I realise how distressing this news will be for all those affected, but I am also extremely aware of our responsibility towards the ongoing survival of this business, which will continue to employ about 1,500 people in South Yorkshire,'' Koehler said.

Mumbai-based Tata Steel employs around 80,000 people worldwide and has a turnover of over $24 billion.

Its European subsidiary, formerly Corus Group Plc, is the second-biggest steel producer in the continent, having steel making facilities in the UK and the Netherlands and manufacturing units across Europe.

Tata Steel's managing director for specialty and bar business Mark Broxholme said that economic circumstances continue to undermine the work Tata Steel has done, but that refocusing on the high-value aerospace market was initiated in 2009.

''Today's announcement about reshaping the bar business is the next stage in that journey and would give it the best chance to succeed in these fiercely-competitive markets,'' Broxholme said.

The announcement came just after the workers' unions suspended a call for strike in Tata Steel's sites over a long-running demand for changes in the company's pension scheme.

The UK's trade union GMB said the news was a very big blow for UK manufacturing and it would consult with the government to address the issues of high energy costs in the country compared with the rest of Europe.

The UK prime minister David Cameron's official spokeswoman said the government was doing all it could to keep energy prices down for consumers and businesses.

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