Ruth Mosalski
Thu, 25 April 2024
Workers at Tata in Port Talbot are to strike after the company ended negotiations over changes to the business which will result in 2,800 direct job losses. Negotiations between unions and the Indian steel giant have today ended at a meeting in London, formally closing any chance of an alternative plan put forward by unions being adopted.
The company will end blast furnace steel production at the Port Talbot plant and will build a £1.25bn electric arc furnace, recycling scrap steel. The UK Government has contributed £500,000 grant towards the plan saying it was the only way to secure any jobs.
The company has confirmed it will close blast furnace five in June and blast furnace four in September. Tata says that its plan will be the largest investment in the country’s steel industry in decades and secure the future of UK steelmaking, protecting the "majority" of jobs and reduce the UK's carbon emissions. But they say it is not viable.
READ MORE: MPs told 2,800 job losses at Port Talbot will be 'tip of the iceberg'
READ MORE: Tata threatens to withdraw generous redundancy offer if Port Talbot steelworkers strike
"However, the unions’ own analysis shows their proposal would cost the company at least an additional £1.6bn when it is already losing £1million a day. Their plans are also high risk and would jeopardise the transition to green steel making,"
A ballot of Unite members, said to total 1,500 across Port Talbot and Llanwern, has already taken place with industrial action being one option. Now, as talks with the company have broken down, the union has said strikes will be announced soon.
A ballot of Community members, the biggest union of workers at the site, is ongoing with a result expected on May 9. The GMB is also consulting its members. No strike action is expected before all the members in all unions have voted.
Community's national Officer for Steel Alun Davies said: "This is an incredibly disappointing day for Tata steelworkers who have been betrayed by a company which owes them so much. It is disgraceful that Tata Steel have chosen to pursue a discredited, bargain basement deal over a viable plan for decarbonisation which would protect jobs and preserve the country's primary steelmaking capacity.
"I know that many of our members will be feeling dejected and anxious today, so it's vital we stick together to look after one another in these uncertain times. It's also vital that we take a stand together and send a message to Tata that we will not go quietly into the night. As someone who has had the privilege of working at Port Talbot and Llanwern, I know first-hand how steel is part of our lifeblood here in south Wales. If the company think that we'll let them trample over our industry and our communities now, they really don't know us at all."
A voluntary redundancy progress will start on May 15. Tata says it expects to place equipment orders for the electric arc furnace by September 2024 and based on current permitting timelines, begin construction on the project by August 2025. It is working with the National Grid to have the power infrastructure in place to commission the electric arc furnace on schedule by end-2027.
Unions have put forward an alternative plan to the one the company is pursuing but the Indian steel giant has said it is unviable. The UK Government has put money into Tata's scheme, saying it is the only way to secure any jobs at the site.
Community General Secretary Roy Rickhuss said: "We do not accept the company's assertion our plan was too expensive - in fact, it would have returned the company to profits, and the additional capital expenditure needed to make it a reality could have been funded by an additional £450m from the government - a drop in the water compared to what other European countries are investing in their domestic steel industries. For the latest politics news in Wales sign up to our newsletter here.
Unite has described Tata’s poverty pleading over its UK operations and its claim that alternative options for Port Talbot are not feasible as a sham.
Unite general secretary Sharon Graham said: “Tata is an immensely profitable company using our outgoing government’s inadequacies to make easy money and boost its other operations at the expense of UK jobs and the national interest.
“Why else would it be rejecting the promise of £3 billion for UK steel investment from an incoming Labour government and turning its back on a location ideally placed to reap the rewards of a steel market projected to grow tenfold?
“Our current government has utterly failed to stand up to Tata and demand better for Port Talbot and Llanwern’s steel communities and the country. Tata’s workers, with Unite using every power at its disposal, will not so easily be defeated. It's plans will be answered with industrial action."
Following a meeting with the UK Steel Committee, Tata Steel’s CEO and managing director, Mr. TV Narendran, said: "Having looked carefully at all the options over the past seven months in consultation with union representatives, we have decided to proceed with our proposed restructuring and transition. This is the most viable proposal, in contrast to the unions’ unaffordable plan which has high inherent operational and safety risk.
"Our proposal secures a long-term future for the business and preserves the majority of jobs in the UK. We will continue to work with the trade unions over the following 2 weeks to agree a memorandum of understanding on the future of the UK business and the impact on our people. Tata Steel is committed to creating a low-CO2 steel business at the heart of a green industrial ecosystem in Wales and the wider UK to safeguard steel supplies and create economic opportunities for generations to come."
Jo Stevens, Shadow Welsh Secretary, said the news consultation had ended is a "gut punch". "This is a total gut punch for people in Port Talbot, and the potential economic consequences will reverberate across south Wales for years."
First Minister Vaughan Gething and Welsh economy minister Jeremy Miles have said: "Quality steel, made in Wales, is the economic bedrock for many communities across Wales and is vital for the economy and security of the UK.
"We have consistently argued that there is a better deal for the industry and Tata workers that could and should be struck - securing a longer, fairer transition towards the greener production of steel in Wales. The Welsh Government will continue to make the case for that fairer transition and do all we can to support the skilled and loyal workforce and those in the supply chain. We will be reaffirming this commitment this afternoon to the transition board."
Welsh secretary David TC Davies said any strike action was a matter between unions and the company. "I think it was inevitable Tata was going to close the blast furnaces because of the losses they are making. We don't want disruption to the supply chain.
"People feel very strongly about this and 2,800 people face losing their jobs so I understand why they are angry and upset however I don't want to get into taking sides."
Tata Steel UK’s CEO, Rajesh Nair, said: "We have spent the last seven months openly and transparently sharing detailed business information, asset condition, maintenance plans and market forecasts with our trade union colleagues and advisers. While we have agreed to keep the Hot Strip Mill running through the transition, the unions’ plan presents significant financial, operational and safety challenges, and delays the transition to green steel by two years. We have concluded that it is not feasible to accept their plan, and it is not affordable.
"This is a difficult period of change for our people, and we will do our upmost to support them. Tata Steel has always been a responsible, long-term and patient investor in its UK business, and we are committing significant
Unions criticise Tata after plan to save steel jobs is rejected
Unions say their alternative plan to avoid thousands of job losses at Tata has been rejected by the steel company.
Community criticised the decision not to accept the unions’ “credible alternative” to the company’s “bad deal for steel”.
Unions met the company in London on Thursday with another plea not to press ahead with its proposals for its plant in Port Talbot, South Wales, which will lead to the loss of jobs.
Tata Steel has insisted its £1.25 billion plan for a state-of-the-art electric arc furnace in Port Talbot would be the largest investment in the steel industry for decades and would secure the future of UK steelmaking.
“It would protect the majority of jobs, reduce the UK’s carbon emissions by five million tonnes a year and could kickstart a green industrial revolution in South Wales,” said a spokesperson.
‘Incredibly disappointing’
Community general secretary Roy Rickhuss said after the meeting: “It’s incredibly disappointing that Tata have chosen to reject the multi-union plan, which is an ambitious and viable alternative to their destructive bad deal for steel.
“We do not accept the company’s assertion our plan was too expensive – in fact, it would have returned the company to profits, and the additional capital expenditure needed to make it a reality could have been funded by an additional £450m from the government – a drop in the water compared to what other European countries are investing in their domestic steel industries.
“Tata have made their decision, and our members will decide on our collective response.
“Tata made a proposal to negotiate a package with the unions to give us firm assurances on jobs and future investment, and we will consult our members on how we proceed
“We want to make one thing absolutely clear to the company: this isn’t over – not by a long shot. We will never stop fighting for our jobs, our industry, and our proud steel communities.”
Members of Community and the GMB are being balloted on whether to strike over the plans. Unite members have already voted in favour of industrial action.
‘Serious mistake’
Community Assistant General Secretary Alasdair McDiarmid said: “Tata have made a serious mistake in rejecting the credible, expert-backed Multi-Union Plan. Today’s announcement confirms that this was never about what was best for the steel industry, the country or the long-term future of the business: it was always about short-term cost-cutting.
“With their decision today, Tata have missed an historic opportunity to commit to a bold and ambitious future based on transformative strategic investment. We will continue to call on the company to change course, and a clear mandate for industrial action in our ongoing ballot will only strengthen our hand in negotiations.
“Our resolve to oppose Tata’s bad deal for steel – a plan which would be bad for jobs, bad for the environment, bad for national security, and devastating for our communities – has never been stronger.”
Community’s national officer for steel Alun Davies said: “This is an incredibly disappointing day for Tata steelworkers who have been betrayed by a company which owes them so much.
“It is disgraceful that Tata Steel have chosen to pursue a discredited, bargain basement deal over a viable plan for decarbonisation which would protect jobs and preserve the country’s primary steelmaking capacity.
“I know that many of our members will be feeling dejected and anxious today, so it’s vital we stick together to look after one another in these uncertain times.
“It’s also vital that we take a stand together and send a message to Tata that we will not go quietly into the night.
“As someone who has had the privilege of working at Port Talbot and Llanwern, I know first-hand how steel is part of our lifeblood here in South Wales. If the company think that we’ll let them trample over our industry and our communities now, they really don’t know us at all.”
‘Gut punch’
Jo Stevens, shadow Welsh secretary, said: “This is a total gut punch for people in Port Talbot, and the potential economic consequences will reverberate across South Wales for years.
“The Conservative Welsh Secretary has said no one will be left behind if they lose their job. I will be holding him to account on that every step of the way.
“A UK Labour government will invest in our steel industry to make sure the future of UK steel is fuelled by the skills, talent and ambition of Welsh steelworkers.”
The GMB said the meeting was “an unwelcome but not unexpected slap in the face.”
The GMB said one of the blast furnaces at Port Talbot will close by the end of June, and a second in September.
“Discussions will continue on future business commitments on volume and people, including the redundancy package,” said a spokesman.
Jonathan Reynolds, shadow business secretary, said: “It is devastating news Tata Steel are pressing ahead with the Government’s plans to close both blast furnaces in Port Talbot triggering thousands of job losses.
“With other options on the table, and with an uncertain future, Labour urges Tata not make any irreversible decisions about the site.
“Labour has long called for the Government to step in to protect jobs and maintain vital primary steel capabilities in South Wales.
“It’s clear the Government has no plan for steel, for an effective industrial strategy or for our economy.”
Saddened
Paul Davies MS, Chair of the Senedd’s Economy, Trade & Rural Affairs Committee said:“We are deeply saddened to hear Tata has concluded discussions with the steel unions and intends to proceed with its proposals to close both blast furnaces. The whole Senedd has been clear that keeping a blast furnace in Port Talbot during the transition to an electric arc furnace is the right thing to do”.
“This decision will have major implications for workers and their communities. It is vital that they are supported through this massive change”.
“We are also disappointed to see Tata using redundancy packages as a bargaining chip in its industrial relations – all workers laid off should be entitled to the enhanced redundancy package already offered – with no additional conditions attached”.
“The UK and Welsh governments must act quickly to support those that will be made redundant to progress into new, good quality employment and to make sure the strong talent pool we have currently working at the steelworks is not lost to south Wales.”
Plaid Cymru spokesperson for the Economy and Member of the Senedd for South Wales West, Luke Fletcher MS said: “It is deeply disheartening that Tata Steel has opted to dismiss the unions’ proposals – the fallout will be utterly devastating.
“The impact on Port Talbot, surrounding communities and the many businesses throughout Wales that depend on the workforce in Port Talbot will be catastrophic. Months of consultation should have led to a better outcome for workers.
“While Tata may have made their decision, our determination to advocate for the well-being of workers, communities and the future of the industry remains steadfast. We must now see a plan and decisive action from the UK and Welsh Governments who must explore every avenue and use every power at their disposal to safeguard Welsh steel.”
Fifth Tata Steel / Port Talbot Transition Board Statement
The Tata Steel / Port Talbot Transition Board met for the fifth time on 25 April 2024.
Steel being rolled
The Tata Steel / Port Talbot Transition Board met for the fifth time on 25 April 2024.
The Board received an update from Tata Steel UK on their decarbonisation project.
A Local Economic Action Plan was presented to the Transition Board. The Board endorsed the Plan as a broad road map whilst also recognising the outstanding issues need to be addressed and discussed prioritisation of the proposed interventions. The Board agreed that supporting affected employees to find new well-paid jobs will be its first priority. The Board will also prioritise supporting businesses affected in the supply chain. The Board also recognised the importance of longer-term regeneration of the region. It was agreed that this plan, overseen by Neath Port Talbot Council, will be used as a basis for investment, subject to business cases being presented to the Board at subsequent meetings.
Rt Hon David TC Davies, Secretary of State for Wales chaired the Transition Board meeting. Deputy Chair, Jeremy Miles MS, Cabinet Secretary for Economy, Energy and Welsh Language was in attendance. Felicity Buchan MP, Parliamentary Under Secretary of State in the Department for Levelling Up, Housing and Communities attended in the place of the other Deputy Chair, Rt Hon Michael Gove MP, Secretary of State for Levelling Up. Also, in attendance included Alan Mak MP, Parliamentary Under Secretary of State jointly in the Department for Business and Trade and the Cabinet Office; Henrik Adam, Chair of Tata Steel UK; Rajesh Nair, Chief Executive Officer of Tata Steel UK; Cllr Steve Hunt, Leader of Neath Port Talbot Council; Chief Executive Officer for Neath Port Talbot Council Karen Jones; Stephen Kinnock, MP for Aberavon; David Rees, MS for Aberavon; Tom Giffard MS for the region of South Wales; Luke Fletcher MS for South Wales West. The Board was attended by its independent members, Anne Jessopp CBE and Sarah Williams-Gardner. Representatives from the trade unions also attended: Rob Edwards, Regional Secretary for Community Union; Alun Davies, National Officer for Steel & Metals for Community Union; Tom Hoyles, Politics, Press and Research for GMB Wales & South West and Jason Bartlett, Regional Officer of Unite Wales.
-ends-
NOTES TO EDITORS
Tata Steel announced proposals in September to invest £1.25 billion, including a UK Government grant worth up to £500 million, to enable greener steel production at Port Talbot. A Transition Board to support the people, businesses and communities affected by the proposed transition to low-CO₂ steelmaking, was established in October 2023.
The Transition Board will have access to up to £100 million to invest in skills and regeneration programmes for the local area. It will focus on:
Immediate support for the people, businesses and communities directly affected by the proposed transition to low-CO₂ steelmaking at Port Talbot; and
A plan for local regeneration and economic growth for the next decade.
The Transition Board does not oversee the proposed £1.25bn investment in low-CO₂ steelmaking at Tata Steel UK. This is for the company to oversee with the Department for Business and Trade, UK Government.
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