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Business News

Steel giant Tata to cut 900 jobs


Steel giant Tata is cutting 900 jobs and closing 12 sites under plans to improve competitiveness, the firm announced today.

Most of the job losses will be in South Wales, including 500 at the Port Talbot plant, under restructuring of management and administrative posts.

A total of 580 jobs will be cut in Wales, 155 in Yorkshire, 120 in the West Midlands and 30 on Teesside.

Sites to close include Tafarnaubach and Cross Keys in South Wales, while shift levels at the company's Rotherham and Hartlepool plants will be reduced to match production to lower demand for bar products and pipelines.

Indian-owned Tata Steel also announced that it will re-start one of two blast furnaces at Port Talbot in the first quarter of next year as part of a £250 million investment programme.

Karl Kohler, chief executive 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.

"These restructuring proposals will help make our business more successful and sustainable, but the job losses are regrettable and I know this will be a difficult and unsettling time for the employees and their families affected.

"We will be working with our trade unions and government at a national and local level to ensure we provide them with as much assistance and support as possible.

"In addition, our subsidiary UK Steel Enterprise will be looking at how it can provide more support to local steel communities and stimulate new jobs following today.s announcement.

"We will strengthen this work with a further £650,000 to help them create new jobs in affected areas. UK Steel Enterprise has teams in all the affected locations who, for almost four decades, have helped to regenerate local economies and create 70,000 new jobs in the UK.

"We will do everything we can to reduce the impact of the proposals on employees and, where possible, we will look to achieve job losses through voluntary redundancies."

Tata said demand for steel in Europe had fallen by 25% since 2007 and was forecast to slump by another 10% this year.

The company, which employs 19,000 in its steel business in the UK, said it remained committed to investing in the business to help create long-term stability.

Michael Leahy, general secretary of the Community trade union, said: "This news will be of great concern to many of our members and their families.

"We will be seeking an urgent meeting with the company to ensure our principle of no compulsory redundancies is upheld, although we are pleased to see the company has already committed to offering a package of training and support for those affected by these changes.

"Sadly, these potential job losses are symptomatic of the continuing failure of the Government's economic policy and yet another reason why we are calling on the British Government to take urgent action to stimulate economic growth and help revive the manufacturing sector.

"This announcement comes after a four-year-long downturn in the UK Tata and European steel industry, where the fall in UK steel demand has been steeper than in any other major European economy.

"This is why we need faster investment in infrastructure programmes and community benefit clauses in UK procurement, just as France and Germany do to support their own manufacturing industry."

Dr Kohler 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 furnace had been due to be brought into production this month, but will now re-start in the first few months of 2013.

It will lead to the re-starting of a hot strip mill at Tata's site in Llanwern, South Wales.

Tata said it was concentrating services at six distribution and processing "hubs", which would receive £22 million of new investment and new employment.