Plans to close blast furnaces at steel plant is ‘pretty much’ a done deal

Steel giant Tata’s plans to close blast furnaces at its biggest UK plant with the loss of up to 2,800 jobs is “pretty much” a done deal, MPs have been told.

Company executives said years of losses of more than £1 million at the Port Talbot site, coupled with assets coming to the end of their life, meant that action had to be taken.

Chief executive TV Narendran told the Welsh Affairs Committee that Tata had invested billions of pounds into Port Talbot over the past 15 years, but had reached the stage where decisions about the future had to be made.

Closing the blast furnaces and building a new electric arc furnace was the future and would ensure that steelmaking continued at the site, he said.

He disagreed with unions that Tata’s plan was the lowest cost, insisting it was the only viable way to continue.

“The assets are coming to the end of their life, which would have presented an ever-greater risk. There is now an opportunity to invest in a process which is greener and more sustainable.”

Tata rejected union plans, which included keeping a blast furnace operating while the new one was built, but Mr Narendran told MPs: “The question we are being asked is how much more money can we put into a business that is not working.

“The level of losses is not sustainable.” The Tata executive suggested that other companies losing so much money could have gone bankrupt, but he said the company had worked hard to find a solution to retaining steelmaking on the site.

Committee chairman Stephen Crabb (Conservative, Preseli), asked Mr Narendran bluntly that at what point does Tata’s plan become a “done deal”.

He replied: “Given our financial situation and the quality of assets, we are pretty much there. We need to work with the unions to see how best to deal with the transition.”

The committee was earlier told that the loss of 2,800 jobs was just the “tip of the iceberg”.

Charlotte Brumpton-Childs from the GMB said the scale of job losses cannot be over-estimated.

“The 2,800 job losses proposed are just the tip of the iceberg because of the knock-on effect on people who work in the logistic supply chain, nearby cafes where workers buy their bacon butties, and even dance schools attended by steelworkers’ children,” she said.

“We have one member who signed a mortgage agreement two weeks before this announcement was made, and a senior union rep in his late 20s who wants a job for the next 50 or 60 years.

“This is not a dying industry – it is vibrant and could be providing jobs for the next 100 years.”

Alasdair McDiarmid, assistant general secretary of Community, said that under a union plan, 600 jobs would be affected but other work could be created and any redundancies would be voluntary.

No other steelmaker in Europe is following Tata’s proposals, making the UK an “outlier” as the only company giving up blast furnaces, he said.

Nick Kardahji of Unite, which has put forward its own plan for Port Talbot, said he believes Tata could be more ambitious without the need for any job losses.

Steelworkers travelled from Port Talbot on Wednesday and staged protests outside Parliament as well as attending the committee hearing.