Tata threatens to bring forward closure of blast furnaces at Port Talbot in new blow

-Credit: (Image: John Myers)
-Credit: (Image: John Myers)


Tata has threatened to bring forward the date it will close the blast furnaces at the Port Talbot steelworks after a union began the process of industrial action. The Indian steel giant is changing its operation at the site, saying the financial losses of £1m a day are no longer sustainable.

It will mean 1,900 direct job losses at the Port Talbot site, and up to another 900 further afield. There is no quantifiable number of indirect job losses at other businesses or of contractors, for example, but that is expected to run to the thousands too.

The company will no longer use blast furnaces but an electric arc furnace and the two blast furnaces at the Port Talbot site will both close. The company had been working on the timescale of blast furnace four closing in June and blast furnace five in September. The set up of the site at Port Talbot means that the closure of blast furnace four does not trigger mass lay offs, but when the second closes, it will.

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On Thursday (May 30) Unite, which is one of three unions representing workers at the site, said it would begin industrial action from June 18. Unite workers will begin working to rule as well as taking part in a continuous overtime ban from that date, something the union says industrial action will "severely disrupt and delay Tata’s operations and order book". That was contested by the company, but a letter from Tata's CEO Rajesh Nair to workers, sent on May 31, says he is "extremely disappointed" to have received notice about Unite's plan to take industrial action.

In his letter he says:

  • The company "will be reviewing whether we should now plan to bring forward the dates for the closure of BF5 [blast furnace five] and the winding down of operations across the wider heavy-end"

  • It will start the voluntary redundancy process from next week (week beginning June 3) but due to Unite's industrial action plans staff will be offered "lesser terms" than had been on the table

  • The result of the general election will have no impact on Tata's plans to close the blast furnaces

  • Tata is taking legal advice about whether Unite's ballot was legal

  • Unite has said in response it will look to "escalate industrial action in direct response to the company’s threats"

Mr Nair says the company has "engaged fully and meaningfully" and "substantially enhancing the existing employee support terms, in order to enable a conclusion".

Mr Nair wrote: "To be clear, any form of industrial action will only serve to hurt Port Talbot, Llanwern and the wider Tata Steel business. It will damage our vital reputation with customers and it risks our transformation and future sustainability."

Mr Nair warns in the letter that "in light ongoing impact on the business and the potential for further disruption, especially if we are unable to fully resource the assets and ensure safe and stable operations we will be reviewing whether we should now plan to bring forward the dates for the closure of BF5 [blast furnace five] and the winding down of operations across the wider heavy-end." It is the closure of blast furnace five that would trigger the redundancies across Port Talbot steelworks but the company has clarified it would guarantee no redundancies until September.

The company had already warned it would retract the enhanced terms staff were being offered if there was any industrial action, and has now done so. In the letter, Mr Nair says that "given the damage being incurred to the business as a result of notice being served and the potential further disruption associated with any industrial action, we feel we are being left with little alternative but to reluctantly replace the enhanced employee support arrangements and revert to lesser terms". For the latest politics news in Wales sign up to our newsletter here.

The company also says it has contacted Unite "several times" to "re-iterate the substantial irregularities and errors in their ballots in Port Talbot and Llanwern". It says it will now look at taking legal action and a court found in the company's favour, anyone who had participated in unlawful strike action would have breached their contract.

He also directly addresses the impact the UK's general election could have. While the UK Government has already agreed to give a grant worth up to £500 million towards the transition to the electric arc furnace. It has repeatedly said that without that Tata would have closed the site altogether and all Tata's 8,000 UK jobs would have gone. They say their deal has the "potential" to save 5,000 jobs.

Labour has continued to call for the company to wait for the election result before taking any decisions as Labour has committed to a £3bn fund for the steel industry, which includes the current UK Government's £500m grant. But has not been able to answer questions about exactly how much of that money would go to Port Talbot or what it would be spent on because the company has said while it is open to further investment in the plant there was "no way" the blast furnaces could be kept.

In his letter, Mr Nair says: "To re-iterate, neither the general election nor its outcome has any impact on the timings or our decision to proceed with the winding down of our heavy-end operations."

Unite has said it response it will prepare to escalate industrial action in direct response to the company’s threats. "

Unite general secretary Sharon Graham said: “Unite and its members will not tolerate Tata’s bully boy tactics and neither should Labour. The union is now preparing to escalate industrial action in direct response to the company’s threats.

"The company is trying to hold the country to ransom, while needlessly throw thousands of workers on the scrapheap. If Tata is not prepared to do the right thing, then an incoming Labour government must ensure it does. Tata’s actions show the fundamental problem with private multinational companies owning the UK’s foundation industries. It has no concern for the long-term economic damage and harm its action will cause in the UK."

A Tata Steel spokesperson said: "Following the publication of our most generous employee support package to date and having shared assurances for the future of the UK business with our trade union partners, we had hoped they would put the revised offer to their members. It is therefore disappointing that Unite have decided on industrial action—we are now considering our legal options regarding the legality of their ballot.

“The enhanced package will remain in place unless industrial action is taken, in which case it would revert to our standard terms. n light of the ongoing impact on the business, the potential for further disruption, and in order to ensure safe and stable operations, we are now considering bringing forward the dates for the closure of blast furnace 5 and the winding down of operations across the wider heavy-end.

"We are asking Unite to withdraw their call for industrial action and put the revised offer to their membership."