Tata throwing in the towel.

Tim203

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After years of allowing all our scrap metal to be flogged off ( including gold!) and now the predictable shoulder shrugging when the N word is mentioned is it any wonder the BBC then announce our exports are less than our imports.
Do people honestly believe cheap materials will still be obtainable when China and India's living standard catch up with ours? Too late then, we'll only be producing a nation of people who can drive computers by then, and of course a few inventive resourceful people being ignored, just for a change.No change there then.
Yours bitterly disappointed etc. .............
 

st13phil

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I listened to a venture capitalist on R4's Today program this morning explaining why we didn't need a steel industry, and how we could just import any steel we need, so the best thing would be to just close it all down. I despair...
 

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Yep going the same way as the mining industry won't have any steel industry left either.

Also Ferrybridge power station closed today no new capacity to replace it making the headroom next winter negative for the first time if we have a bad winter
 

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I don't disagree... what are our options though?

Everything was fine while the Tata family funded British jobs at a cost of (according to Tata) £1m a day... but they are no longer willing to do so.

To be fair to Tata... whatever issues we may having in the UK, it is not really their problem.

So what can the government do?

Declare steel to be an essential industry and nationalise it? Yes, but then the onus of financing it goes to us, the taxpayer. If we are to pay for this, then we would want to know if our money is going to secure jobs in Port Talbot, or to protect essential British industry, or both?

If the government were to raise import tariff, this would hurt other workers in industries that use steel - manufacturers will close down factories in the UK if steel becomes too expensive here (Bush tried this with import tariffs on steel in the US at the time and it backfired badly, killing off entire industries). I don't see Ford keeping the Dagenham plant open if cars made there would cost significantly more to make then in Europe because steel is more expensive in the UK.

Offer insentives? Tax cuts? Government grants? Blair did this with BMW just before they went on and pulled the plug on Rover anyway. Throwing good money after bad money?

To clarify... I am sympathetic to the plight of the steel industry workers, just not sure what the solution is?
 
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flango

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I'd agree with this you can no longer class it as an essential industry. Steel is cheaper to import from the US let alone China. Most specialist steel comes from Scandanavia. We are just so uncompetitive on the world stage.

All the obvious solutions have been tried in other countries and failed.

I was working at an Arcelor Mittal plant in Kazakhstan they are so back integrated it's unreal operating their own coal and iron ore mines securing fixed price raw materials. Unfortunately most companies operating in the UK don't have that foresight

I'm not sure what the solution is either but coming from the mining industry myself sympathise with the workers and their families
 

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Then:

https://en.wikipedia.org/wiki/2002_United_States_steel_tariff

"The protection of the steel industry in the United States had unintended consequencesand perverse effects: it reduced production of steel in the United States, increased costs to users, and increased unemployment in associated industries."


And now:

http://www.forbes.com/sites/greatsp...cts-of-domestic-steel-producers/#79ea3cc63157

"The imposition of anti-dumping duties on Chinese steel imports will make them prohibitively expensive, which should boost both demand and pricing for domestically produced steels."
 
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Red C220

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It's illegal to nationalise the steel industry as a member of the EU (agreed between all EU members) unless you can prove it puts the countries economy in danger.

So to that end it's mute conversation (the nationalisation aspect that is)
 

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if its making a loss, it means you can buy it cheaper else where. however is it cheaper to pay all those people affected with dole or accept subsidies? I hope the government have a heart
 

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Or... presumably if the Government offered to pay Tata the £1m per day they say they are losing... then Tata would keep the plants?

But to what extent is it justified to pay someone to provide jobs? The counter argument would be that unemployed people could re-train and find new jobs (or at least some would) which will see the issue resolved over time, while people in subsidised employment will never see the need to seek new employment hence perpetuating the issue.
 

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The problem with exiting industries like mining or steel production is that it's a one-way street: you will never be in a position to start it up again. The fact that steel (and coal, tin, etc.) that used to be produced in this country can be purchased cheaper on the world market today than they could be produced here is today's news. It may not be tomorrow's. One thing life has taught me is never say never.

Chinese steel flooding the market is just one of Tata Steel's problems. Another is that UK energy policy means that they pay in the region of £35 per megawatt of energy. As a comparison, German steel manufacturing pays around €25 per megawatt. For an energy-intensive industry, that sort of cost differential is catastrophic.

Simply put, the UK has had no realistic manufacturing and industrial strategy for decades because our politicians lack the knowledge or vision to create one. So instead they pretend we don't need one. QED.
 

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I assume that our Government knew this was coming and feel that their lack of involvement shows how it is going to end up.

Whilst it is true that we cannot be competitive in the current market place, and that the amount we make is minuscule compared to China and the USA, there is, allegedly, a real issue with quality, particularly product from China.

There is a major high rise office building in London which is going to litigation due to structural failure of large diameter bolts. Allegedly the suppliers could not procure these in UK so bought them elsewhere - guess? Lack of adequate certification, non - compliance with relevant standards / codes of practice puts people at risk.

A sad state of affairs indeed.
 
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Tim203

Tim203

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markjay said:
Or... presumably if the Government offered to pay Tata the £1m per day they say they are losing... then Tata would keep the plants? But to what extent is it justified to pay someone to provide jobs? The counter argument would be that unemployed people could re-train and find new jobs (or at least some would) which will see the issue resolved over time, while people in subsidised employment will never see the need to seek new employment hence perpetuating the issue.
I do accept it is a difficult one, perhaps I am holding onto our once great industrial heritage despairingly whilst I see other countries like Germany making 'simple' adjustments and carrying on as normal. I am just a simple person in these terms but our nations short sightedness and through this, waste of time and money with unintelligent decision making hurts. When I see how difficult it is to find decent fabricators or machinists. I went to a bearing company in Birmingham and the average age was probably 50. It was a serious problem for them. In our small business it's not far off that. Just as an aside we have a couple of jobs where we are buying small Dia. Chrome Moly tube at around £30 a foot from the states and it ultimately ends up going back as an engine mount! Same story for a lot of stainless steels we use. It can make it difficult to be competitive and it can add 2 weeks to the delivery time.
Edit: thinking about it I believe all our raw material is imported ( mostly stainless ) . Still at least we export a lot of this again.
I realise our little firm is just a tiny drop in the big scheme of things but there are a lot of little companies around when you start looking!
 
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zipdip

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Well without doubt the Chinese can make steel cheaper than everybody else in the world,they have the raw materials and their cost base is very low,they also have far less emissions laws to contend with,I think there is a need for tariff barriers,but it seems that Cameron stopped the EU from introducing them a while ago,if this is allowed to go on and we close our steel industry,and other countries go the same way then at a much later stage the Chinese can ramp the price up,maybe when we get out of the EU and save all those millions we pay every day to that failed experiment we can fund the steel industry to the tune of 1 million a day,but it is a big problem and there may be many solutions,
 

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87,000 (and rising) job losses in UK oil industry and no one even notices.
 

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87,000 (and rising) job losses in UK oil industry and no one even notices.

The issue is what do you do when the business model becomes no longer viable?

"The government" supporting or subsidising any privately owned business in this situation is doing so from the public purse, or taxes. So by default, we would all be paying out of our own pockets for an indian owned business to be subsidised to continue to produce a product that's not financially viable.

Is that right?

I've never fully understood this situation when it comes to farming and subsidies either.

The government wouldn't and shouldn't arbitrarily support carpet shops if it was no longer financially viable to sell carpets so why steel and farming?
 

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^^ Quite and to be fair the Government are heavily criticised when budget time arrives and the National Debt is increasing. Clearly you can't spend large sums of money supporting failing businesses and lower the deficit or am I missing something?
 

artyman

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The problem is the difference between price and value, yes it may cost more to produce steel here rather than buy in from China, but what is the value of being self sufficient in steel production, the same with food and energy, if you become reliant on external providers you have no control over your destiny.
 

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That's the way they want it artyman - no control.
 

optimusprime

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The way i see it is ,we have a big nothing in uk now .If you look on ebay for an item .And you look to see the location of it .None, or very little, in the uk. As for steel if we need it for armaments at any time we will need to import it for the people that dont like us .So i dont think we will get any steel .Things that you need on Ebay you can not purchase .China ,Rumania ,Germany .Australia ,America. All have items you need but not UK. We are a sinking island .If anyone wanted to invade us it would be a walk over .Years back they had an exercise in the atlantic.We had no ships to take our troops out there and had to hire passenger ships to do the job. Or like the new arcraftcarier just built with no aircraft to line the dack.
 

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