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From The Socialist newspaper, 21 July 2009

Action to save steel jobs

LEADING UP to the autumn of 2008, Corus, Tata Steel's European arm, was riding on the crest of a wave with a healthy order book. Then the steel industry hit capitalism's self-constructed brick wall. With orders for steel collapsing, amid the turmoil created by the banking crisis, the standing down of blast furnaces at Scunthorpe and Port Talbot was announced.

A steel worker

Corus then began a cost-saving initiative called "Weathering the Storm". A new way was promised, one that would not include the 'slash and burn' of previous downturns in demand. The workforce were asked to suggest ways of saving money. This led to over 180 million being saved throughout the UK business.

However, it wasn't long before the inevitable suggestion of wage cuts reared its ugly head. Shift premiums were cut to suit demand and the cries of "let's all share the pain" were heard everywhere.


After Christmas 2008, with no agreement in place for reduction in wages, an announcement of job losses came under the guise of restructuring. Over 3,500 redundancies were announced with Rotherham being decimated to the tune of 700 job losses and the Hot Strip Mill at Llanwern being mothballed.

On top of this there was a proposal to close the pension scheme to new entrants. Corus also announced that it was selling its major stake in Teesside Cast Products (TCP) for around 320 million.

The New Labour government did nothing to help, despite pleas from local MPs. The company continued on its cost-cutting measures and in March 2009 an agreement was reached with trade union national officers for local site negotiations to take place which would look at savings, including employment costs.

This took the form of a 'Framework Agreement' with Port Talbot and Scunthorpe at the forefront. At Port Talbot there were moves to suspend bonus payments for one year but a ballot of trade union members was cancelled due to an upturn in demand from the car industry.

During this period of local negotiations came the bombshell of the mothballing of steel production at Teesside. This was due to the collapse of the deal to sell TCP and the consortium of four separate steel producers walking away from a ten-year agreement to purchase slab from Teesside.

At Scunthorpe an agreement was reached which would suspend bonus payments, see the return of shift premiums and a possible salary cut of 4% if specific savings targets were not achieved each quarter. This agreement would guarantee no job losses for 12 months.

With just a few days to go before the workforce ballot was due to begin came the shocking news of further redundancies.

Over 2,000 jobs were to be lost with Scunthorpe and South Yorkshire taking over half of these. Trade unions at Scunthorpe immediately cancelled the ballot and were warned that further job cuts would result from this action. The trade unions took the view that the agreement was now seriously flawed and that they could not continue it.

The government lamely announced that it would provide 5 million for the training of the workers being made redundant. This is paltry compared to the billions that have been thrown at the financial sector. The difference between hard hats and bowler hats has never been more pronounced.

Then, on 9 July, a further 366 redundancies were announced at Scunthorpe and 149 at Port Talbot. This brings the total for the year at over 8,000, which is almost one-third of the UK workforce.

What we are witnessing is the slow death of the UK steel industry. Immediate action is required to save what is a significant contributor to UK industrial output.

Community union, supported by Unite, has launched a Save Our Steel campaign, primarily aimed at the Redcar works. It is hoped that this will develop into a national campaign to persuade the government to step in and secure steel production in this country.

Instead of waiting for market conditions to improve, the government should renationalise steel and develop a plan for production which includes the construction and car industries.

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In The Socialist 21 July 2009:

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