SSI - Redcar Plant To Close
Iron and steelmaking at a huge steelworks is to be mothballed, with the loss of 1,700 jobs, dealing a "devastating'' blow to the industry.
Thai firm SSI said it was with "regret'' that it had to announce the decision to mothball facilities at its Redcar plant on Teesside.
The company said that after a further evaluation of the business, it had "no other option'', blaming a severe deterioration in steel prices.
Unions said the announcement was devastating for the area and the economy and claimed the Government should shoulder some of the blame
The company said:
"SSI UK regret to announce that after a further evaluation and assessment of the situation facing the business, it has concluded that they are faced with no other option but to mothball its iron and steel making facilities on Teesside. The Redcar Coke Ovens and the Power Station willcontinue to operate.
This decision has had to be taken against a continuing background of poor steel trading conditions across the globe and the consequential severe deterioration in steel prices experienced during the course of 2015, together with the view that this is unlikely to change in the short term.
We will continue to work with various stakeholders, including government, with the objective of restarting operations at Teesside at some point in the future.
As a further consequence of the mothballing, it is proposed to reduce by 1,700 employees, including those affected by the mothballing of the South Bank Coke Ovens which was announced previously.
Consultation with the trade unions and employee representatives will commence as soon as possible.''
Cornelius Louwrens, UK business director and chief operating officer said:
"This is an extremely sad day for all of us at SSI UK, and in particular our employees and their families. Together with our parent company and the various other stakeholders, they have worked so hard in their endeavours to try and make this business successful.
Despite the significant progress we made in the financial performance of the business during 2014, market conditions this year have been extremely challenging and unfortunately this has led to the decision we are announcing today.
I would like to pay tribute to and thank everyone connected with SSI UK for their great support. My wish is that this facility can once again restart operations and fulfil the potential of the plant and its loyal workforce.''
David Hulse, GMB national officer, said
"This is absolutely devastating news for the workers, their families and the community. All that will be left operating will be the coke ovens unless the UK Government steps in even at this stage. It is not too late for them to do so while the furnaces are still burning.
GMB will do all in our power to press the case for Government to act and to protect out members and their families.''
A Unite spokesman said:
"The Government has got to take some responsibility for this. They can still intervene to save Redcar and the thousands of jobs that rely on the plant.''
Roy Rickhuss, general secretary of the Community union, said:
"We had begun to fear the worst over the past few days and this will be devastating news for our members and their families. We will be seeking an urgent meeting with the company to understand the detail of this announcement. We will also be putting in place support for our members in the days and weeks ahead.
Steel making on Teesside must have a future and our fight to save our steel will continue. The industrial assets must be preserved at all costs and the skills base also needs to be protected.
These vital industrial skills have been passed down through the generations and must not be lost. That blast furnace must not become a monument to 170 years of history and it must be mothballed properly to preserve its integrity and give it the chance of a future.
We have serious concerns about the ability of SSI to do this and so the Government must step in to ensure that the mothballing is done properly.
The cost of inaction and the demise of the assets could extend to hundreds of millions of pounds. Not just the cost of cleaning up the site but the economic and social costs from devastating an entire steel community and the lives of the thousands of families who depend upon it.
The Prime Minister said his Government would do 'everything we can' to support the UK steel industry. He needs to deliver on that. Now is the time to demonstrate the political will to see a vital foundation industry continue.
Steelworkers will not give up on their industry and their heritage. The Government must not give up on Teesside's steelworkers.''
Angela Eagle, shadow business secretary, said:
"The latest announcement from SSI shows how critical the situation in Redcar is. Unless the Government acts, 1,700 jobs will be lost.
It is unacceptable that the Government is allowing strategic industries to fail. This Government's ideological decision not to have an industrial strategy is putting jobs at risk.''
Unite national officer Harish Patel said:
"This is devastating news for Redcar and the thousands of people who depend on the steelworks for their livelihoods. Steel is the lifeblood of the local economy and runs through the community's veins.
The Government's much vaunted Northern Powerhouse risks being nothing more than empty rhetoric unless it steps in with assistance to save the SSI plant on Redcar.
With so many livelihoods at stake and the UK steel industry at crisis point Government ministers need to follow the lead of their counterparts in France, Italy and Germany by pursuing an active industrial strategy which supports the UK's steel industry.
Over the coming days Unite will be doing everything we can to support our members and the community and pressing Government ministers to intervene and save our steel.''
Redcar's Labour MP Anna Turley accused SSI of playing "fast and loose'' with the plant's future, and claimed the Government could have done more to prevent the closure.
She told the Press Association:
"It's absolutely heartbreaking, it's devastating. It's a huge number of jobs, it's a huge number of livelihoods, but it is more than that to our community.
Redcar was built on steelmaking, Teesside was built on steelmaking. It's about generations of people that have worked in that blast furnace and fought so hard, not just in the last few days but in the last few weeks, months, years, to keep steelmaking alive. It's just been allowed to fizzle out.''
She called for the Government to take control of the site and its assets.
"SSI have played fast and loose with us for weeks and months and the Government has got to get control. They cannot be allowed to run the asset into the ground. I don't believe this is a sustainable mothballing, I want to see the Government step in and take control of the asset so we have got a future for steelmaking on Teesside and in the UK.''
Speaking at the Labour Party conference in Brighton, she added that SSI "have not treated the workforce fairly, they have not treated the local supply chain fairly'', and also criticised the lack of Government intervention.
"I can't understand that things have been allowed to get to this stage, here we are, it's about to be driven off a cliff and no-one has been able to step in and do anything about it.'' she added.
Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said:
"This is a very sad day for the industry and of course for the communities affected by this decision. Any loss of the UK's steel-making capability is a huge blow and has knock-on effects across the manufacturing supply chain.
In the short-term we need a clear indication from Government - as a matter of urgency - that it will honour its commitment to compensate steel and other energy-intensive industries from the cripplingly high cost of energy.
Failure to do so would mark a tipping point for this vital industry which is the foundation of the success of so many other manufacturing sectors.
Government must now sit down with the steel sector and all interested parties to examine how a long-term viable and sustainable industry can be supported in the future. This is imperative if we are to ensure that such a vital industry can be placed on a long-term sustainable and profitable footing.''
Business Minister Anna Soubry said:
"Despite everyone's recent efforts to help SSI this is very sad news and a big blow for the workforce and their families. They are the priority and, with SSI's difficulties being no secret, why I had already asked Amanda Skelton, chief executive of Redcar and Cleveland Borough Council, to chair a local taskforce to help support workers and the local economy. I also have concerns about reports that local contractors have gone unpaid.
I hope that SSI's announcement that they are mothballing the furnace gives some hope that steelmaking could be restarted on Teesside in the future.
The steel industry across the UK is facing very challenging economic conditions. The price of steel has almost halved over the past year, with over-production in the world market. While government cannot alter these conditions, I have called a steel summit to see what more can be done to help our steel industry.''
James Wharton, MP for Stockton South and Northern Powerhouse Minister told TFM he won't resign:
“I’ve not heard any calls for my head, it certainly isn’t (something I’d resign over).
Firstly steel police is not my ministerial responsibility, that comes under the department of business innovation skills, and secondly, what is it people would like to see the Government do?
It’s very easy to say that this is bad news and something must be done, but what must that something be? We’ve been supplying support for SSI for far longer in recent months than this has been in the public domain and the media, significant sums of money we’ve been able to find mechanisms to give to support have been released, but we’re bound by European State Aid rules, we can’t just give them a grant, we can’t just give them a loan and despite everything we’ve tried to do, all the work that we have been doing with the company, we’ve sadly reached this stage today.
It’s very difficult, but it’s one thing to shout “this is terrible” it’s another to say “here is a viable solution” - and in the absence of the latter, and an absence of a real alternative, something that we could and should be doing, I don’t think those calls are anything more than hot air and finger pointing and they don’t enhance the debate and they don’t help the people affected at all”
Reacting to today's news of the mothballing of the SSI plant on Teesside, Labour MP for Stockton North, Alex Cunningham said:
"Today's announcement is a bitter blow to the whole of Teesside and beyond with thousands of jobs affected over and above the loss of the 1700 at the Redcar works. The time for government action is long overdue and instead of the Chancellor trying to persuade the Chinese to bid for lucrative contracts to build our railways, he should be doing something to stop them dumping their cheap steel into the British and European markets. At the same time, the Prime Minister must intervene to bring forward the protection from high energy and related costs being suffered by our energy intensive industries. Only then will we have a chance to rebuild our once proud steel industry."
Liberal Democrats on Redcar & Cleveland Council reacted with great disappointment to the news that 1700 jobs are to be lost following SSI’s halting of its steelmaking at Redcar blast furnace.
Lib Dem Council Group Leader Councillor Josh Mason said:
“This is truly heartbreaking for the area, and especially for the families of those losing their jobs. The job losses will have a huge knock-on effect for local businesses and the council.
The council stands to lose an enormous amount of money in lost business rates. This affects the entire community.
Many people believe that the Tories simply do not care about our area. They now have a chance to show that they do care by ensuring that they give the council the money it needs to support the families hit by this decision and to carry on providing services without a big hit on its income.”
Former MP Ian Swales said:
“The Government needs to do all it can to support the community and to try to find a buyer with enough resources to get through the tough times.
What is often forgotten is that Redcar is still a very good steel plant, capable of high quality production. With the right buyer it could again live up to its potential.”