Up to 200 jobs could be lost at four of Tata Steel's European plants, as part of a recovery programme for its tubes business, which has seen a drop in demand.
Tata Steel announced the programme, which will be brought in over the next few months, and will also involve changes to equipment to improve yield, and focusing on products at the high added value end of the range, on Wednesday.
“In response to the prolonged downturn in all European markets for tubes, and in the context of intense competition, the measures announced today are designed to bring these sites into a sustainable financial position,” said Mr Remco Blaauw, Managing Director of Tata Steel's European tube business.
“Our goal is to secure a sustainable tubes business which will not only weather the current economic storm, but can prosper in the future.”
Tata Steel's European tubes business has seen a drop in demand of 20-25 per cent from normal levels. In the second half of last year, production at Tata Steel's European operations – as a whole - fell to between 80 per cent and 85 per cent of capacity, as the firm mothballed a blast furnace in Scunthrope and a hot strip mill in Llanwern in Wales.
The sentiment of UK manufacturers about the general situation and export prospects have fallen “sharply” in the past three months, the business organisation the CBI warned on Wednesday.
“We know that 2012 will not be an easy year. The watchword continues to be uncertainty,” said Mr John Cridland, Director General of the CBI.
Four plants will be affected by the latest recovery programme: the Corby tubes plant in Britain, where around 110 jobs are expected to be lost, and three in the Netherlands: Zwijndrecht, Maastricht and Oosterhout, where 17, 28 and 45 jobs, respectively, are anticipated to be lost. In Britain, a 90-day consultation with workers and trade unions will take place, and a similar process in the Netherlands. “The company will explore opportunities to re-deploy employees where practical,” Tata Steel said.
Ms Louise Mensch, the Conservative Party MP for Corby, tweeted that while she was “disappointed” with the consultation and redundancies, she was “very glad the plant's future is secure and Tata is seeking voluntary redundancy and early retirement where possible”.
However, Mr Paul Talbot of the Community Union, representing steel workers said they would be looking for an urgent meeting with Tata Steel for reassurances on the plant's future and voluntary redundancies.
“This is a very serious situation with serious implications and we want to be satisfied so we can assure our members that everything has been done to get assurances that in the long term the plant is safe.”