Today is a sad day for my hometown Port Talbot. The culmination of weeks, if not months of rumour and fear, just over 750 jobs are to be lost at the town’s Steel Works.
The Steel Works is an iconic landmark in the town as anyone who has driven past it on the M4 will testify. The plant has been in place for over 100 years and over those years had many owners.
It is now owned by Tata steel, and is the largest plant in the UK, producing amongst the best steel in the world. Tata Steel employs more than 80,000 people worldwide and is part of Tata Group (which also owns Jaguar Land Rover amongst many other companies).
Port Talbot is a state of the art plant which has benefited from millions of pounds of investment, this isn’t a tired old factory, it is a highly skilled environment.
The Port Talbot plant however is losing money, big money. Estimates from those ‘in the know’ say that it is losing £1m per week, some go so far as to say that it is actually £1m per day (Update 29/03/16 – it has been confirmed that the plant is losing over £300m per year). Clearly this is unsustainable for any business, and it was only a matter of time until something happened.
Over 4,000 people are currently employed at the plant, and it is estimated that over 12,000 people are indirectly employed in addition to this, that’s 16,000 people in a town with a population of just over 37,000 (2011).
Whilst 750 jobs have gone today, there is no guarantee that this stops the rot and stops the loss making. Operational changes will now take place with the hope that this saves the plant, clearly though a major problem continues that Chinese steel (significantly cheaper than British steel, some say less than cost price) is still flooding the market; it means that this is far from over and the future isn’t looking bright without significant changes.
Far more knowledgeable people than me have commented on what could or should happen, I just hope that something happens.
Away from steel, the town needs fresh investment and new jobs. Sure the UK government can play its part by offering more support in terms of business rates and high utility costs as the Unions have asked, but I also think that the Welsh Government can do its part in supporting the town wherever possible.
Around 600 HMRC jobs are in the process of being moved from bases in Wrexham and Swansea in to Cardiff (linky), is there any reason why Port Talbot could not benefit from something like this by the setting up of a new tax office in Port Talbot?
Whilst I’m not saying that a steelworker will want to move into an administrative job, it gives options and could give someone the opportunity to retrain if they wish. Many people in Port Talbot have to commute to access non-Industrial jobs as there are simply so few in the area.
Port Talbot has great road (M4) and rail access (a stop on the main line from Swansea to Paddington) and has many (vacant) units that could be utilised. Housing is cheap and you are a short distance from both the sea and mountains.
The time for the wringing of hands is over, the residents and workers do not want to hear the rhetoric of politicians blaming each other – they need action and investment to save this town now. None of us want to see a repeat of the 1980’s, where skilled mine workers found that their skills were suddenly of no use – make no mistake, this is what could happen to the steelworkers of today all across the UK (mainly Wales and the North of England).
I ask the UK Government and Welsh Government to please support our local communities and look to how you can tangibly support entrepreneurship and the investment of larger companies (as well as the public sector) in communities like Port Talbot, as this downturn really does have the potential to affect a generation of people in this community.
UPDATE 20/01/2016: Edwina Hart, Economy Minister, has talked about developing an Enterprise Zone in Port Talbot, in an area which would include the Steel Works site (link). This should offer some assistance in terms of business rates and some tax relief on capital spending; It’s a start I guess.
UPDATE 29/09/2016: Following the Budget announcement that parts of Port Talbot would become an Enterprise Zone (as above) and the progression of 750 jobs being placed at risk, today is the day that the Tata Board vote on whether to approve a plan (billed as a rescue plan) which is planned to turn around the fortunes of the plant by moving the operation from £300m annual debt, to £100m profit in a number of years. “Insiders” have told the press that aspects of the plan are unrealistic, especially in the timescales that the Board are expected to demand. The plan is said to include the mothballing of aspects of the operation, and further redundancies.
What is the other option? The media point to closure. Tata are said not to want to sell the plant as it would interfere (in competition terms) with their other European operations (unlike the other plants that they have sold in previous years), which makes the situation look even more bleak for the Works, the people within it, and Port Talbot in general.
There is a call to the Welsh/UK Government to nationalise the Steel Works, I don’t know how realistic this is however or whether it is even possible.
It is very unlikely that any decision will be published today, regardless of how the Indian Board vote, all anyone can do unfortunately is sit and wait, as they have done for months.
The BBC have some great coverage here, on why the Steel Works are important for Port Talbot, Wales and the UK in general.