Tata Steel announced Tuesday that it will cut around 1,200 jobs in the U.K., mainly at its plants in Scunthorpe in North Lincolnshire and Lanarkshire in Scotland. The company blamed inexpensive Chinese imports for the falling prices of steel.
The steel industry in the U.K. is reportedly grappling with falling prices, high energy costs, inexpensive imports and the strength of the pound, which has led to exports becoming heavier on the pocket.
About 900 jobs will be cut at the India-based company’s plant in Scunthorpe and 270 jobs will be cut in Scotland, along with job cuts across the U.K. The confirmation of the job cuts came from the company after days of speculation about its plans. Union leaders and staff leaving the Scunthorpe plant said, according to the Guardian, that they were “devastated” by the news and added that it would not be clear who would be affected in the job cuts until the consultation period was over. The Scunthorpe plant employs 4,000 people, according to the BBC.
“I realize how distressing this news will be for all those affected. We have looked at all other options before proposing these changes,” Karl Köhler, chief executive of Tata Steel’s European operations, said in the statement, adding: “The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth. The European commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”
British Prime Minister David Cameron has so far promised to take up the issue of the country's ailing steel industry amid inexpensive Chinese imports with Chinese President Xi Jinping, who is currently on a four-day-visit to the U.K., BBC reported.
Tata Steel reportedly tried to sell the division undergoing job cuts, but failed. The company also said in the statement that plate mills in Scunthorpe, Dalzell and Clydebridge would be “mothballed” and two coke ovens at the Scunthorpe steelworks will be closed down.
“In the past two years, imports of steel plate into Europe have doubled and imports from China have quadrupled, causing steel prices to fall steeply. At the same time, a stronger pound has undermined the competitiveness of the business’s Europe-bound exports, and encouraged more imports,” the statement said.
The company also said that it will begin consultations Tuesday with Tata Steel employees and trade unions, which will last over 90 days. Tata employs about 17,000 people in the U.K., and its news follows the announcement that SSI, the Thai owner of the Redcar steelworks in northeastern England, was going into liquidation, cutting 2,200 jobs, the Guardian reported.
"The significance of this is that it could be the end of steel production in Scotland,” John Park, assistant general secretary of trade union Community, said, according to the BBC, adding: "Tata Steel have to be persuaded to mothball the site rather than close it and the Scottish government has to have a role in keeping the infrastructure secure and supporting short-time work until a future can be secured."
Paul McBean, from the Community union, said, according to the Guardian: "We knew it was coming but it doesn’t make it any easier. I’ve worked here for 40 years and I don’t know my future. It’s the same for a lot of people in there."