The UK steel business of Sanjeev Gupta has confirmed that more than 400 jobs could be lost under restructuring plans in the face of what it described as challenging market conditions. As part of the restructure Liberty Steel UK (LSUK), which is part of the GFG Alliance, said its steel making facility in Newport, South Wales is being idled and turned into a storage, distribution and hub as well as its operation in West Bromwich. Its tubes business in Tredegar is also impacted.
In an interim measure it also plans to reduce its primary production at Rotherham, which will be replaced by imported billet and slabs to feed rolling and finishing lines at Rotherham, Scunthorpe, and Dalzell.
With the support of major customers, LSUK said it will focus on high value alloy steel production at its Speciality Steel UK (SSUK) sites in Rotherham, Stocksbridge and Brinsworth serving strategic aerospace, energy and engineering supply chains
LSUK, which employs nearly 2,000 - while also supporting a further 5,000 contractor roles - said it has begun consultation with unions and the UK Government over the proposals that could see 440 roles lost. It said it will look to provide alternative employment for staff affected.
The Mirror has reported that up to 185 posts could go at Rotherham, 121 at Newport, 99 at West Bromwich and 35 in Tredegar. The company has blamed "unviable" market conditions including high energy costs and the impact of cheaper imports for its decision
Jeffrey Kabel, chief transformation officer for LSUK “Refocusing our operations will set the right platform for Liberty Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities. The support of our marquee customers will enable us to produce high value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy. We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a 2 million tonne green steel hub.
“While our action is expected to regrettably impact the roles of some of our workforce we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy. Liberty’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”
Mr Gupta is currently the subject of a probe by the Serious Fraud Office.
Shadow business secretary Jonathan Reynolds said: “This is devastating news for Liberty steelworkers, their families and the community built around this proud industry.
“Labour wants to see a thriving domestic steel sector, that is why we will partner with industry, investing in green steel over the next decade to keep jobs in the UK for generations to come.
“Endless sticking plasters from the Conservatives have left our UK steel sector on the brink. Instead of finding a long-term solution, successive Conservative governments have lurched from crisis and bailouts with no plan to keep UK steel internationally competitive or deliver a return on taxpayers’ investment.
“Labour has a plan for steel, investing in the future alongside industry over the next ten years to deliver green steel.
“Steelworkers need a government on their side and industry needs a partner that can provide stability, not sticking plasters.”
Alun Davies, national officer of steelworkers union Community, said: “This announcement is a body blow to Liberty Steel’s loyal UK workforce, who couldn’t have done more to get the company through an exceptionally challenging period.
“Since the collapse of Greensill Capital, the trade unions have supported the company because we believed that delivering the company’s business plans, which were audited and backed by the unions’ independent experts, was the best route to safeguard jobs and the future of all the businesses.
“However, the plans we reviewed were based on substantial investment and ramping up production, including at Liberty Steel Newport, and did not include the ‘idling’ of any sites.
“These are challenging times for all steelmakers but the company’s decision to change their plans, on which we based our support, and announce a strategy seemingly based on capacity cuts and redundancies is devastating.
“The consultation on these proposals must be meaningful and the unions will be scrutinising the detail of plans to idle Newport, West Bromwich and Tredegar, including Liberty’s commitment to restart the plants when conditions allow.
“Government must play their part, stop the dithering and act to deliver the competitive energy prices our industry so desperately needs. Steelworkers have had enough of warm words, it’s past time for government to decide whether it wants a steel industry in this country.”
Leader of the Welsh Liberal Democrats, Jane Dodds said: "It is extremely concerning that the Liberty site in Newport is set to be idled. While I welcome moves by Liberty to minimise any job losses, many will be concerned about the future of not only this site but the production of steel and associated products in Wales as a whole.
“One of the primary challenges that the Steel industry is facing is high energy costs, something which the Conservatives have utterly failed to confront or prepare for in the past.
“Domestic steel production and associated products such as Hot Rolled Coil (HRC) are vital to our national security, we need to see the UK Government take a much more hands-on approach to protect employment in the industry and to assist in the transition to the production of green steel.”
A spokesman for the Welsh Government said: "We are deeply concerned by Liberty Steel’s announcement regarding their facilities in Tredegar and Newport. We understand the company have entered a consultation process with their employees, who are being supported by trades unions.
“We remain committed to a successful, low carbon future for Welsh steel. However, achieving this goal requires urgent action and grip from the UK Government. That’s why we have repeatedly called on UK Ministers to urgently bring forward a package of support to secure steel-making in Wales.
“The steel industry - and its highly skilled, dedicated workforce - is a crucial cornerstone to our economy and its future is essential to our prosperity and security. We will stand up for steel – and steelworkers – in Wales.”
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