In yet another restructuring drive, Tata Steel Europe has announced slashing of 900 jobs across its facilities in UK. 500 jobs are being cut at its Port Talbot plant.
Off the total job losses of 900 in the UK, 580 are being cut in South Wales followed by 155 in Yorkshire, 120 in the West Midlands and 30 in Teesside. Because of the low demand for steel bars and pipes, the Rotherham and Hartlepool operations will be reduced to match the lower production.
This is not the first time Tata Steel Europe is cutting jobs at its plants. Earlier it cut jobs at its facilities in Scunthorpe, North Lincolnshire, and IJmuiden, Netherlands. The company has also shut down its facility in Shotton and sold part of Teesside Cast Products (TCP) to Sahaviriya Steel of Thailand for $469 million.
The company said that it is making changes at a number of steel finishing and processing sites in the UK that would improve its product and service offering for customers. “These changes would concentrate services at six distribution and processing hubs which would benefit from £22 million of new investment and new employment, but would also lead to the closure of 12 sites, including Tafarnaubach and Cross Keys in South Wales,” it said.
Karl Köhler, CEO of Tata Steel’s European operations, said: “Today’s proposals are part of a strategy to transform ourselves into an ‘all-weather’ steel producer, capable of succeeding in difficult economic conditions.
With this restructuring, the company also said that it will restart the blast furnace # 4 at the Port Talbot facility in the first quarter of 2013. The commissioning of the blast furnace will also lead to restarting of its hot strip mill at Llanwern site in Newport, South Wales. The company has spent £250 million to rebuild the blast furnace at Port Talbot.
Köhler said: “The restarting of the Port Talbot furnace will improve our competitiveness and allow us to enjoy the benefits of a modern, state-of-the-art furnace, which, combined with the planned downstream investments, will also enable us to improve customer service. Although slightly delayed because of the current market conditions, restarting the furnace will allow us to return to sustainable production levels.”
The restructuring drive started in 2009 laid out a plan to cut 3,500 jobs in Europe because of the poor economic sentiment and steel demand. Last year, the company had cut 1500 jobs at Scunthorpe and Teesside plants.
In 2010, Tata Steel Europe motballed TCP plant that left 1600 people jobless. The company has also shut down its Living Solutions in Shotton, North Wales cutting 180 jobs more.
In 2009 alone, Tata Steel Europe had cut close to 4500 jobs in Europe in order to battle the demand downturn in its key markets.
In the second quarter ended September 30, 2012, Tata Steel Europe continued to suffer lower steel prices and demand in Europe.
It posted an EBITDA loss of Rs 40 crore in the said quarter. On November 9, Karl Ulrich Kohler, managing director and CEO, Tata Steel Europe said, “We are certainly not seeing major improvement in steel consumption this year in Europe.” The consumption is 25 per cent less than the pre-crisis levels, he said.
