Redcar Steel WOrks

[rob murray]

Iron and steelmaking at SSI's Redcar plant in the north-east of England is to be mothballed, with the loss of 1,700 jobs. This is happening beacuse the company involved have posted losses these past 3 years, prices have decreased as production of steel world wide has been over produced....what can any government do in this situation ? ANyone any answers ?

[dozy]

Iron and steelmaking at SSI's Redcar plant in the north-east of England is to be mothballed, with the loss of 1,700 jobs. This is happening beacuse the company involved have posted losses these past 3 years, prices have decreased as production of steel world wide has been over produced....what can any government do in this situation ? ANyone any answers ?Get the unions to band together and take it over ,ask the Government for half the money they would use in JSA and use it as an Community asset and don't pay a penny for it SSI had their chance. Unions have pots of money when it comes to paying the unions yes men ,so let's see that money used to do some community good . Too many windbags in that party.

[Alien Adrenaline Reflex]

Imagine that... a tory government and a steel works goes out of business...

[BetterTogether]

Imagine that... a tory government and a steel works goes out of business...Imagine that a private business that isn't competitive and unable to keep up plummeting world prices going out of business and not being propped up by the government.

[rob murray]

Imagine that a private business that isn't competitive and unable to keep up plummeting world prices going out of business and not being propped up by the government.

Its really complicated this one, the owners are not British they are a Thai company Sahaviriya Steel Industries (http://markets.ft.com/tearsheets/performance.asp?s=th:SSI) who bought the plant ( from TATA steel in 2011 ) and poured money in including 469 millions for Redcar, hence ran up a huge debt which they couldnt service due to plummetting steel prices caused by a world wide over production, mostly from China. Flooding the market with cheap Chinese product ( China needs foriegn trade / currency as they are moving are in a slow down ) has forced the price of slab steel down by 45% in just 12 months, from $500 (£330) a tonne to about $280. If they hadnt bought the plant from TATA steel then in all inevitability the plant would have been either closed or slimmed down by TATA. The Thai banks wont give any wriggle room to the owners ( delayed repayment schedules ) hence they cannot operate at market prices, common sense, whats the point in producing steel and stockpiling it when there is an over supply and the debts wont go away. Worryingly TATA steel, owned by an indian company one of the UK's biggest steel manufacturers has been trying to sell off the works at Shorpe. ONly hope is to keep the assetts with a skeleton workforce until steel prices rise, but that would mean waiting for a global cut in steel production which given Chinese economic situation wont happen. Union argements are the costs of unemployment and cleaning up the site ( if de commissioned ) would run into hundreds of millions hence arguement is to keep the assests. That would have to mean that the UK government would buy the plant / pay the debt, effectively nationalise the plant,and keep it mothballed with a skeleton staff but in a climate where steel prices are low they could be accused of throwing good money after bad. A real mess but caused by debts and external global issues which wont go away.

The UK continues to be at a disadvantage because of high energy costs, compounded by environmental levies which are not faced by competitors in Europe....TATA steel Shorpe was going be bough ( 2015 ) t by an American industrialist group headed by Gary Klesh who has now pulled out of the deal leaving 4,000 jobs at Shorpe under threat.... in an interview with the Financial Times, Gary Klesch, the head of the group, said he was withdrawing in frustration at the government’s apparent lack of interest in old-economy industries.
“What is the industrial policy when it comes to energy or when it comes to the massive dumping of cheap Chinese steel?”
No one seems to care... The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out.''– Gary Klesch, speaking to the Financial Times



Mr Klesch added that steel workers were “being led to the slaughterhouse” by ministers’ failure to tackle energy costs and Chinese imports.
A spokesman for the Klesch Group confirmed that the company is no longer in talks with Tata about the possible purchase of the steel works.

Government can listen to the guy and tackle high energy costs and streamllne environmental levies...this will not save Redcar at all as teHE situation is beyond resolution..... but gee if Sghorpe goes we will be importing most of our steel from China, the end of UK steel ??? The Northern Powerhouse.........

[BetterTogether]

Alas it's a conundrum the nations been hook line and sinkered into swallowing the green lobbies agenda on green power hence prices have shot up we could produce cheap power if it wasn't for all the pressure groups howling at the government.
We could nationalise the place but that would go against competition rules EU whichever way you turn it's a mess but it's not the governments fault.


Now I'd like to know why you think Northern Powerhouse means heavy industry isn't that showing a rather archaic view of the north.

[rob murray]

Alas it's a conundrum the nations been hook line and sinkered into swallowing the green lobbies agenda on green power hence prices have shot up we could produce cheap power if it wasn't for all the pressure groups howling at the government. We could nationalise the place but that would go against competition rules EU whichever way you turn it's a mess but it's not the governments fault. Now I'd like to know why you think Northern Powerhouse means heavy industry isn't that showing a rather archaic view of the north.

AGree on green stuff, energy as well, ( the smelter in Invergordon was closed because of high electricty costs...arguement being lower costs and the plant would have bee economically ) EU competition rules yep spot on......archiac view of the north.....could be...but certainly on Teeside and in Shorpe...steel is a power house employer ( factoring in the supply chain jobs etc ) no slur / pop intended....just a fact areas based around steel will take a big hit.

[BetterTogether]

Aye well that's the issue if we stuck to traditional industries how many men would be sat around blocks of stone with copper chisels hammering away, how many lochs would have wee coracles floating on them and I suspect you'd have complaints from th kids getting stuck up chimneys as well.

[rob murray]

Aye well that's the issue if we stuck to traditional industries how many men would be sat around blocks of stone with copper chisels hammering away, how many lochs would have wee coracles floating on them and I suspect you'd have complaints from th kids getting stuck up chimneys as well.

IN the steel scenario I cannot see your point at all. Time move on of course, better ways of doing things emerge, skills become outdated, industries go....but in the case of steel that doesnt apply, UK steel is being hit by Chineses over production / high energy / environmental costs as you know, its not that the industry is now past its sell by date is it ? All your examples point to long gone scenarios.

[BetterTogether]

IN the steel scenario I cannot see your point at all. Time move on of course, better ways of doing things emerge, skills become outdated, industries go....but in the case of steel that doesnt apply, UK steel is being hit by Chineses over production / high energy / environmental costs as you know, its not that the industry is now past its sell by date is it ? All your examples point to long gone scenarios.

A bit like the coal industry eh !


Meanwhile I've a good example of the green energy scheme for you !

[rob murray]

A bit like the coal industry eh !


Meanwhile I've a good example of the green energy scheme for you !

Coal.......good example.....green energy scheme lol lol lol ...spot on. The business landscape is so complicated nowadays though, what with all the legisaltion / EU mandates etc....over complicated and over regulated in many ways.

[BetterTogether]

Coal.......good example.....green energy scheme lol lol lol ...spot on. The business landscape is so complicated nowadays though, what with all the legisaltion / EU mandates etc....over complicated and over regulated in many ways.From my perspective that's what you get when socialism is allowed to run a bit rampant and I'm referring to the EU. Before you kick off though rampant commercialism isn't acceptable either.

[rob murray]

From my perspective that's what you get when socialism is allowed to run a bit rampant and I'm referring to the EU. Before you kick off though rampant commercialism isn't acceptable either.

AGreed...why would I kick off ??? We are all sensible centrists arent we ?

[BetterTogether]

We try to be most of the time

[Redsnapper]

Seemed to be able to find billions to bail out the banks though and no one ever appeared in court. Mmmm.

[rob murray]

Seemed to be able to find billions to bail out the banks though and no one ever appeared in court. Mmmm.

Fair point......................but theres no criminality here just market forces...and massive Chinese over production flooding the world....only thing that government can realistically do is do a deal to keep the plant mothballed, cut energy charges, role back environmental costs and wait to see if market demand rises and Chinese hit difficulties...what else can you do ???

[Redsnapper]

Chances of that happening are just about zero and when the upturn comes we become yet more dependant on imports and more reliant on financial services to keep the UK afloat. Served us well last time round didn't it ?

[BetterTogether]

Chances of that happening are just about zero and when the upturn comes we become yet more dependant on imports and more reliant on financial services to keep the UK afloat. Served us well last time round didn't it ?Do you have a sensible alternative that doesn't involve the state running business's at a massive loss, we've seen how that worked out in the 1970s certainly not a period anyone with a long enough memory would want to go through again.

[rob murray]

Chances of that happening are just about zero and when the upturn comes we become yet more dependant on imports and more reliant on financial services to keep the UK afloat. Served us well last time round didn't it ?

I dont disagree with you but what can you do....bring back trade tariffs block out chinese steel...all that will do is provoke chinese into blocking our exports. No one can insist that all UK steel users can only use UK made steel as that will put them at a competitve disadvantage. Dare I say it...nationalisation of a restructured steel infrastructure : would Merkel stand back and watch German steel industry go down the tubes...I havent got an answer but some how there has got to be a way out of this but its beyond me, or as you say we are back to financial services and import dependancy.

[Redsnapper]

I've was born before ww2 ended so have lived through the lot. I well remember 3 day weeks, Red Robbo etc etc. ( and even rationing !). I watched British manufacturing more or less vanish during the Thatcher era and we were always fed the line that it was all down to the unions and lazy workers never bad management. Curious how these same 'lazy' workers under the management of Nissan , Toyota etc, became and continue to be some of the most productive workers in world. There is no good reason, if well managed, that nationalised industries cannot be efficient and profitable. I seem to recall, that quite recently, the East Coast trains were doing quite well after been taken back into public ownership.

[BetterTogether]

How about this then as an idea.

Should gov suspend UK Carbon Floor Price (= large electricty users paying twice as much as EU ave.) as part of Redcar bailout package?

[Redsnapper]

Why not indeed; and at the same time, start taking advice from professional engineers who have some idea of the long term requirement investments needed to keep British industry competitive.

[rob murray]

BTG Redsnapper....100% agree........................................great workable ideas