Tata Steel to close Newport factory; 400 jobs at risk

Tuesday 03rd September 2019 15:29 EDT

In yet another setback to UK’s stumbling steel industry, Tata Steel has announced the shutdown of its factory in south Wales with a potential risk of 400 jobs. The Orb Electrical Steels plant in Newport, south Wales, owned by a European subsidiary of the Indian conglomerate Tata, is to shut after 121 years of steel making. Tata will also close a service centre in Wolverhampton, which employs 26 people. The company said the closures had nothing to do with Brexit; competition from much larger players in China and Japan is understood to be the key reason.

Tata’s European boss, Henrik Adam, said: “I recognise how difficult this news will be for all those affected and we will work very hard to support them.” Rebecca Long-Bailey, the shadow business secretary, said: “This is yet another blow to the UK steel industry and the communities that rely on it. This government’s reckless no-deal policy is hammering manufacturing before Brexit has even happened. The government must urgently work with steel unions and industry to implement an emergency strategy for the sector.”

The closures come after British Steel went into liquidation in May, but ongoing talks between the government and a division of the Turkish military pension fund, Oyak, over a rescue deal that could save more than 4,000 jobs. Tata Steel previously owned British Steel before selling it to the investment firm Greybull Capital for £1 in 2016.

Tata is expected to offer workers at the plant the option to move to other parts of the business. Tony Brady, the national officer for steel at the Unite union, said the closure of Orb, which makes steel for electrical transformers, was “yet another body blow for the economy of Wales. Unite will be fighting for every job and holding Tata Steel’s feet to the fire over assurances that workers affected by today’s announcement will be redeployed,” he said.

Orb Electrical Steels is part of Tata’s Cogent subsidiary, which has been up for sale since last year. Buyers were found for two other divisions but not for Orb. Upgrading the site to meet customers’ changing demands would have cost £50m, Tata said. “Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges,” said Adam.

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