SSI Put Into Liquidation
Thai firm SSI, owners of the Redcar steelworks, is to go into liquidation. Sources told the Press Association that the board had applied to wind up the Teesside business, with a formal announcement being made later today.
The move followed a Government has announcement of an £80 million package to support workers who have lost their jobs at the huge steel plant.
Around 1,700 jobs are being axed after SSI announced earlier this week it was mothballing iron and steelmaking.
The money includes funding for workers to train at local further education colleges and to help them start up their own business.
Business Secretary Sajid Javid, who attended a meeting of a local taskforce in Redcar today, said:
"This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy. Across government we will continue to focus on providing assistance where we can.''
The Government also confirmed that the company made a "last minute and unrealistic'' request for the taxpayer to make an "open-ended'' funding commitment to maintain the coke ovens in Redcar.
A statement by the Business Department said:
"The Government cannot accept the request. On the basis of the limited business case it was given, the Government has no confidence that this is a realistic proposal for taxpayers to support.
In addition, it would be illegal and in breach of state aid rules. The company has never made a profit and the board's proposal would do nothing to address the huge debts outstanding to local suppliers and other parties.''
A spokesman for the Community union said:
"We have been saying for weeks that SSI is not fit for purpose. It is clear that SSI has yet again put forward a plan to government that lacks credibility.
We believe there are alternative plans and parties who could intervene to protect the industrial assets. Government's responsibility has not ended with the announcement of this support package.
It should intervene to remove SSI and support an alternative approach that gives steel-making an improved chance of a future.''
The Government had warned that liquidation of SSI in the UK was now a "risk'' after the company entered "rehabilitation'' under Thai law.
A steel summit will be held on October 16, involving steel companies, MPs, unions and governments to discuss the future of the industry.
Gareth Stace, director of trade body UK Steel, said:
"This is a welcome announcement to support the local community in its hour of need. Government has put this marker down as a sign of intent and it is an important first step in ensuring vital skills are not lost and livelihoods are supported.
It is for Government to decide whether there was a case for using taxpayers' money and if this wasn't made for business reasons then we have to accept that.
However, the much bigger issue is the future of the steel industry in the UK which make no mistake is in crisis. The forthcoming summit now assumes ever greater importance and it is critical that the Business Secretary spearheads a campaign to secure a sustainable future for the sector
The Government is able to ensure steel companies operate on a level playing field and it must use this opportunity to support the steel sector as I fear** time is of the essence.''
Roy Rickhuss, general secretary of Community, said:
"This is of course yet further devastating news for the workforce, their families and the community. We will be taking steps to ensure our members' interests are represented through this process and putting claims forward for what they are owed.
My union, Community, will establish our own taskforce of organisers, legal and education and training officers to support our members, their families and the entire community on Teesside at this extremely difficult time.''
Following the news of the SSI UK liquidation local UKIP MEP Jonathan Arnott said,
"The SSI plant in Redcar has been an integral part of the local community for many, many years. Not only will these 1,700 jobs now be lost with all the uncertainty that redundancy creates, there will be a secondary impact on many other local companies associated with the steel industry.
Redcar already has a high level of unemployment, so the impact upon the local community cannot be overestimated. I am deeply disappointed that our government did not fight harder to keep SSI open - and in the part played by EU state aid rules and British energy policy.
Whilst I welcome the £80 million government package to help redundant workers, could that money not have been better spent to keep the plant open in the first place?
The tragic part is that the plant could have been profitable in the long term; raw materials will not always be so expensive, the pound will not always be so strong and Chinese dumping is not permanent so steel prices will rise.
My thoughts turn now to the future; is it still possible that it be mothballed in such a way that the door is left ajar for re-opening this plant - probably under new ownership - when economic conditions change?"
Gareth Stace, Director of UK Steel, said:
“It may be too late for SSI, but the situation in Redcar brings the problems facing the UK steel sector into sharp relief. The Government must now spearhead efforts to support the steel industry and the supply chains it feeds. The steel site in Redcar remains a viable and efficient plant and the Government-led steel summit taking place in two weeks will be a make or break event for the entire industry."
Commenting on the announcement of a support package from Government in respect of SSI, Gareth Stace, Director of UK Steel, said:
“This is a welcome announcement to support the local community in its hour of need. Government has put this marker down as a sign of intent and it is an important first step in ensuring vital skills are not lost and livelihoods are supported.
It is for Government to decide whether there was a case for using taxpayers’ money and if this wasn’t made for business reasons then we have to accept that.
However, the much bigger issue is the future of the steel industry in the UK which make no mistake is in crisis. The forthcoming summit now assumes ever greater importance and it is critical that the Business Secretary spearheads a campaign to secure a sustainable future for the sector.
The Government is able to ensure steel companies operate on a level playing field and its must use this opportunity to support the steel sector as I fear time is of the essence.”
Statement from Anna Turley MP on SSI UK and the £80 million support package from government
“The government has today thrown in the towel and turned its back on steelmaking in Teesside.
We do not accept their view that a hard closure is the only option and I am deeply disappointed they have rejected all of the options presented to them so far.
We will continue to fight to ensure there is a future for steelmaking at the site but realise now we will get no help from government. Our attentions now turn to working with the official receiver to establish how debts, salaries and pensions will be paid and, crucially, how the site will be secured for the future.
We will work with the administrator, local suppliers, and Tees Valley Unlimited to try and ensure the valuable assets are secured and maintained so that steelmaking can return to Teesside should a buyer be found.”
The fight goes on.”
On the £80million government support package for affected workers:
“We welcome any financial support from government to help alleviate the impact of this terrible situation on the community. However my fear is that the £80 million will not go far enough or fast enough.
We need some urgent answers on how this money will be spent and how soon it will get to the people who need it most.
There are a huge number of outstanding issues that need to be resolved including unpaid contractors, a workforce who are continuing to turn up to work without knowing if they will get their wages at the end of the month, and supply chain businesses who are owed thousands. There is little comfort in this £80 million for them.
What is more, investment in skills and training is always important but I would ask to what end? Training courses will not replace the 1700 good quality, highly skilled jobs at the steelworks.”