Steelmaker to cut 2500 in UK

This article looks like a kite-flying exercise to test public reaction before GB makes an decision/announcement.

Yet another example of how the reession will hit us all. Unfortunately the Government will run out of options to help us soon as it runs out of money.

Alvin apprentices to the local blacksmith, Nearly completed with apprenticeship, Alvin begins work on his journeyman piece, a plow which he intends to turn to gold.

A foreign company losing jobs in this country should come as no shock.No doubt they will be shutting major plants if they dont get government help.

Be an interesting fight as all the remaining plants are in Labour heartlands.

Just another once core industry that we will have to import the products for in a few years when things pick up.

Not a surprise, the asset bubble reached metals too, and now the industry is suffering all over the world. Like it or not, there will be reduced demand for years and that means overcapacity. Other countries more reliant on mining and smelting are having a much worse time of it.

Next the BBC will be denying charity airspace for an appeal for donations for Corus workers who have lost their jobs - as this could use similar footage to that used by the BBC and confuse viewers over whether it was supporting worker rights or not. Why not ban all charities from air time if they may actually help to rectify some of the humanitarian problems revealed in BBC news programs as each case might be misconstrued as the BBC supporting measures to help resolve the problem?

Supply has to match demand so what is the problem.

''The company wants to use this semi-idle period - which it expects to last for six months - to retrain its employees.''

Why 6 months, what is the order book, or is it a guess. And if only 6 months what is the problem.

Direct support to industry (what is left of it) is absolutely essential.

The house is burning down and to date we have only saved the arsonist who started it from the flames (the bankers).

We desperately need to save the real skills and industries that will be needed for re-construction from the flames as well. Otherwise we will have no house and nothing left to build a new one with.

I fully support this initiative.

Maybe it could be part paid for by a windfall tax on the arsonists bonuses over the past 8 years say?

Sound fair?

Jericoa

#2 The government never runs out of money because it can make it, or ask the Bank of England to make it.

We're still not getting to grips with this downturn. As long as the money supply can only be added to by creating new debt then we are in a cycle of always having to borrow to keep going. When the confidence goes that is it. If the government intends to keep spending its way out of the recession then we'll see the pound become less valued and go into an inflationary cycle, while still not creating more jobs!

Britain either has to be prepared to run an unbelievably massive deficit which may not work, or the government has to take over the power of money creation without saddling the economy with debt. Why not? The banks do it, but take no responsibility for the massive power they wield.

It's my feeling that the British people do not like massive borrowing. It unsettles them deeply, and that alone will see the Conservatives return to office. Savers will be protected and workers will suffer.

I don't believe that Corus can keep all of these plants open in the future because demand is going to slump further as the latest figures work their way through the system, and that re-training is a prelude to the sack.

If there is going to be any propping up of businesses (which I'm not sure there should be) it should be British businesses.

Ok, jobs would go at foreign-owned companies like Corus but jobs would remain at British businesses. We've seen so many UK brands disappear off the face of the Earth in the past few months - let's try not to have any more.

They're quite lucky at Corus . I read that an Indian owned plant in Bulgaria the Indian management just walked out and left it in the hands of an engineer with no further instructions and no contact number.

I suppose that this is as close as we get to 'good news' now. It's limited to a small section of the population and the owner is trying (it would seem) to protect as many jobs as possible in this very hostile business climate.

Looks as though those in power have moved from 'global crisis' 'started in America' 'Britian well placed' slogans to 'we are very angry with bankers for pay/risk/business model/loan provision' (select as appropriate). The only persons entirely removed from blame are them (after all they only run the country - and ceratinly claimed the credit from the past successes) plus the regulators (who they put in place).

9 jericoa

The issue is that this business, a matter of weeks ago proposed a 10 percent cut or some other similar action on wages as a solution to their problem. Rejected by the workforce because they could not apparently see it working as a solution and possibly that adopting it would reduce redundancy payouts. Now a short time later it is clear that a 10 percent cut of the wage bill would not have saved the situation. So if the management perception has shifted in weeks. So where is this business going to be in 6 months. On what basis do they feel that if they get taxpayer money they will be okay in 6 months time. The question is not taxpayer money the question is where are they going to be. There is no reason to believe the 6 months figure is right on the managements judgements todate.

Note - The Netherlands situation has been discussed before. It is not a straightforward comparision and the Netherlands has a different arrangements.

post 7

Demand

#1 I agree

a 40% drop in demand, so Corus cuts workers they were going to anyway, and then put the rest on short time.

I'm presuming that the steel processes need a certain number of staff to be viable and keep blast furnaces etc working. Just switching those off will save them rather a lot.

I would appreciate some reflection on the number of jobs being lost across the Tata groups and whether the EU countries are actually bearing the majority of the redundancies in the hope that our states will prop up and subsidise their other operations

Glad to see that we've finally decided to stop flogging the dead horse which is the banking and financial story, at least for a while

Shame you didn't get out of the City of London and go down to Port Talbot a week ago, though, instead of noticing the story in your Sunday Times this morning and repeating parts of it verbatim

For those of you interested in some background to the Corus situation you can find the original story with more detail at:

https://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5580987.ece

PS: was irresistably drawn to the yoghurt section at Morrisson's yesterday and picked up a 6-pack of Muller fruit corners

these are proper jobs...people making things...i despair at this country brown has a lot to answer for..he is a disaster. i bet he celebrates burns night...i bet he does.

I agree with #1, this is appears blatant kite flying given it's not especially dramatic or unsurprising news that warrants a special post on a Sunday unless Comical and Mandy have to decide tonight and Mori are closed for the afternoon.

RP seems to be slipping further from impartiality and more into Labour policy tester than usual.

However if the powers want my opinion.

The basic concept is a no brainer from the basic financial aspect. Better to support as many as are retained in a job and are retrained than consign them to the dole queues. Better for them and better for us.
So long as the support given is less than the amount which the dole would pay out then it is net benefit and worthwhile.

It may in the end make no difference to whether these plants survive the depression or the 'saved' jobs last only another 6 months. But it is an occasion where doing something is better than nothing.
The only other caveat would be a written commitment from Tata to announce their intentions for the remaining jobs/plants for minimum 18 months immediately the next election is called.
It would be very unfortunate to hear them closing one just after we had voted. Not to say a little suspicious.

THE REAL SPECIAL RELATIONSHIP

I see that Gordy managed to get through to the new Prez, allegedly being the first European leader to speak to him by 'phone; bet Obama really enjoyed that....... oh and apparently it confirms and reinforces the special relationship ha ha ha

In my opinion the real special relationship for the past 20+ years has been between Wall Street and the City of London, their respective Masters of the Universe who were united by unlimited greed and duplicity, and abetted by the craven political leaders and regulators on both sides of the pond: Clinton and Major; Bush and Blair; Brown and Greenspan etc etc; a lot of Lets Come Dancing pairings there!

CHINESE COAL MINES AND CITY OF LONDON OPERATING SAFELY

The blatant promotion of 'light-touch regulation' became more extreme as time passed and more and more of the safeguards were removed or dismantled. The quotes from Blair and Brown speeches at Mansion House and close relationships to people like Fred Goodwin tell us all we need to know I think.

Our financial regulation ended up looking similar to Chinese Health & Safety regulation in their coal mines (latest stats 20-30,000 killed per year but lots of coal dug out)

News from Port Talbot and all points outside of the City of London are a direct result of all that 'healthy free-market deregulation' over the years.

Could be as big a scandal as the fabricated WMDs if there was ever a proper investigation, but you can bet your bottom dollar that there won't be one here and there will be a lot of people sweating it if the new US administration shows any signs of having one.

6 THINGS THAT SHOULDN'T HAVE HAPPENED

Here's an interesting link to a little NY Times op-ed piece about the 6 main mistakes leading to the slump.

https://www.nytimes.com/2009/01/25/business/economy/25view.html?_r=1

The list for the UK would be very similar I think but would be nice to have one which also names the names - go on Robert, have a bash.

Rather than give direct financial help to Corus, the government should redouble its efforts to stimulate demand by bringing forward projects requiring steel. Even if it is difficult to increase demand in the short term, the prospect of orders in the medium term would encourage Tata to use its own resources to minimise the run down of UK capacity.

The argument, that projects initiated now will not help in what it is hoped will be a short recession because of long lead time, should be ignored. Even if the recession is short lived, if the government does not compensate for low private activity by putting projects into the pipeline now, recovery after the recession will be slow.

There are plenty of construction projects, that will be needed in the future, which will consume steel. The construction industry, which is also severely hit, would also be best helped by initiating some of these.

Does this proposal also mean that a financial or retaining subsidy could be provided to keep Brown and his muppets employed, too? As the taxpayer already keeps them off the streets, a further subsidy would mean higher taxes. There you go Gordon: it's just so easy when you think it through.

I find it amazing that Varin who has been in charge for quite a few years now decides that he is going to cut 10% of the workforce.
Perhaps his farewell wish to loyal people is tainted by a lucrative payoff.

As per usual the UK takes the brunt of these cuts as it is so much easier for comapnies to get rid of our workers than those in Europe because they have social laws in place to make it more difficult. As our manufacturing diminishes even further so it will become harder to get out of this recession... Unfortunately IT Consultants and Financial Advisors are not the way out of this one.
When will a Government buy into the fact that we need to be self sufficient in order to survive. We cannot and should not be a nation of service providers.

Number 9 ...good post .

Very object report.

But what really can you do to retrain skilled Steel Workers? I do not know if service skills or IT skills could really help here.

As we have no real mosaic of a National Plan in the UK, but have been converted to the Holy Grail of globalization, over the past decade, supported by the rapid advance of websites and the internet, out sourcing to India etc, perhaps it might be time to think green, think sustainability and think long term and National whilst not turning our back on global exports.

We are in danger of not only a crisis of confidence but a full blown financial, economic and social "Crash" which could devastate large swathes of the UK for the long term.

My Grand Father was a welsh miner and once injured, at age 42 years, he never worked again. Human Capital and education which is both useful and marketable is our only salvation, where we reject these City Elite values of £15 Million mansions and value what is best in our companies, both small and large- people.

Will we have to suffer yet another week of GB and AD setting more fires of dispair and panic whilst we burn?

Westminster must start to really press for an Election now, as the public have lost all confidence in our fundamental Institutions, Parliament, BOE, FSA and the BANKS.

Globalization of markets and trade may be a good thing, but National Identity, National interests, National Pride will always come first, ask the Chinese. "Broken Britain" needs a new Chieftan and soon, we can only have our own "Obama" if we have an Election. Brown is making this Nation increasingly angry. He has no mandate and he does not carry a majority of the Country at large, he knows that too.

The UK is moving into a dangerous phase.. it is ungoverned, riding at night on high seas, with the name "Titanic" at the bow.

As President Obama said "God Bless America" on his acceptance of the US Presidency, I say "God help us, here in Britain." We are now riding on prayers.

It is part of running a business to keep employees skills up to date. As a self employed professional, I have to do this at my own expense. Really, Corus is wanting a subsidy for jobs and this sounds like a kite flying exercise.
Corus' UK plants must have become very much more competitive recently thanks to the decline in sterling, certainly compared with the Netherlands and also compared with the large Asian producers. Perhaps the company should be giving the UK a subsidy for this advantage.
Jaguar and now Corus; Tata certainly know how to beg.

So have I got this right?Taxpayer tops up the wages to provide re-training.Isn't training what companies are supposed to do all the time to keep up with a changing market?Sorry I don't see my way to this unless I can audit the training and the outcomes, personally.It used to be my area of experience so gissa job.
Wasn't steel once one of the nationalised industries which had to be broken and sold to the lowest bidder in the 80's?I've already paid for this and lost my investment as a taxpayer,now I may have to do it again.Thought private industry was supposed to be the big brave boy and public ownership was featherbedded.Plus ca change mateys.

Be under no illusion that Steel was a vibrant going concern that was being kept as a strategic UK industry.

Corus and its predecessors has been cut back for years and years. No longer was there any meaningful engineering or development work going on.

When new plant was needed it was bought in. Designed in Germany for the most part.

Gone are the days of inhouse engineering let alone research and development.

If we ever get out of the current mess and need new plant then it will most likely be designed in India. Not just detail design which is happening now anyway but ground up, concept design.

The question that has to be asked of course is "Why have a domestic steel industry".

We import all the raw materials. By sea. We have no high grade ore. High grade coal is expensive to dig. We already import sinter.

Why not just import semi finished steel?
Our carbon footprint would be artificially reduced.

Another British industry consigned to the scrapheap of history.

I was once puzzled but now I have serious debts. Do foreign owned businesses genuinely benefit the country, especially privately owned? Is it all careful and skillful spins and lies? This crisis teaches much we must remember and should extrapolate.

No handouts refused, more demanded and hinted through leverage on politicians and jobs. Countries are played off against one another for long term benefits of no country. Government hand outs increases profits which goes into foreign private pockets.

If the same businesses are owned locally or listed companies, there may be more tax receipts and profits more widely distributed and retained in the country. Benefits of foreign ownership are real and worthwhile only if there is yearly and long term net gain of taxations, GDP, more export earnings over import costs, additional jobs created after taken into account jobs and skills off-shored. A British passport or birth does not mean the holder cares about this country.

Corus job losses are regrettable but where are profits and "incentives" received over the years?

We need to own more businesses and industries, nurture more expertise, organically grow more jobs.

Self reliance, self respect and self determination are ways we msut do to free ourselves of debts and free from those happy to enslave us with debts for their self-interests.

Like #8, glanafon and #10, GrouchoMarxist1 I think this "re-training" at taxpayer's expense idea seems a bit questionable.

If the workforce is so lacking in skills then why bother to preserve it?

If the training is vital to ensure future productivity then why won't Corus itself make this "investment" in it's people?

If you want the answer you have to take the prevailing situation to its logical conclusion. That does not mean you will like the out come but once you have worked it out you can start to direct things effectively.

The West created a boom of money in a false property market which allowed the East tiger economies to develop cheap products to be consumed by people with false value assets

That is we spiralled up wealth [a debt balance- shown as an asset] based on a false economy fuelled by greedy bankers and others

This inflated the price of everything not only homes.

Then some one noticed the problem and hay presto.

Now we know the debt is not worth anything we panic and create another problem causing everything to go racing downwards and it will drop below where a true price should be because we have created massive unemployment and real hard ship in the sectors that just did their job of providing the materials of real need manufacturing building food clothing and supply.

That is most of the problem is being heaped into the real economy of production and value enhancement and housing and so the remedy for cutting back to a true value economy is not being redressed where the problem was really created in financial sector manipulation for greed and government overspending for votes nor in all faith could it be because once the problem was upon us we need the government spending to protect the people who are forced out as victims from the real economy

We can do little now but to let this recession run its course because unless we can create a proper economic model fit for global consumption and based on real physical need in a supply and demand market there is no chance.

We have to have a new order to meet the world as it is today and we need to create opportunities for the 80 percent of the world who live below the poverty line to work and create and enhance and aspire to do things to live just a little better

Now just think of the demand that would create f or products and homes and other things like medicine and entertainment that make every one better off including the service providers

One phenomenal problem there has to be a way of swapping the take culture to the philanthropic culture, the sharing culture of cooperation and I don’t mean a co-operative [there is a big difference] stop admiring the brutish bullies and admire the unassuming talented
Build a society fit for us all to live in

Problem is the false economy has some way to fall and until it does the real economy is going to be battered and more people hurt and become dependant on the state making it longer.

So sit down now governments and work it out do what we elected you for.

If we really are supplying advance briefing questions for a press conference tomorrow, here's some they might consider:

Exactly what are the training objectives/expected learning outcomes that the UK is being asked to pay for?
What exactly will these people be able to do in 6 months time that they cannot do now?
Is that really worth the cost?
If so, why won't Corus pay for it?

Steel is a cyclical business. The cycle used to be about 5-7 years. It used to be reflected in British Steel's (precusor to Corus) profits and turnover.

I wonder where we are in the cycle?

The Guardian reported from Brussels on Christmas Eve that the EU had rushed through permission for HM Gov. to put in place £500bn 'insurance' for banks' credit default swaps... at a premium of: 50 basis points plus 100% of the median 5 year swap rate from August '07 to August '08.

Will Hutton (and others) quoted RBS's and Barclays' exposure to CDSs as £1.7tn (now £1.9tn due to the fall in the pound, presumably). The median rate was harder to track down. I believe it to be around 0.3%.

0.3% plus 0.5% = 0.8% of £1.9tn is £15.2bn to be paid annually for 3 years (with possible extension to 2014. No wonder RBS are pleased to be relieved of the 12% preference shares.

However, can the banks that enter the scheme afford £45.6bn over 3 years AND continue to build up their equity AND lend?

Mycoblastus, 25 Jan '09

errrr.... seems like no one told the unions there is gonna be job cuts.... someone spreading porkies? lol

Tata - Jaguar Land Rover - acquired 2008
Tata - Corus - acquired January 2007

Where did the money come from? What did it cost?

Will support for Tetley Tea be next?

I agree Jericoa - tax the bankers who put us here.
Having said that the steel makers are at fault due to their greed as well - the cost of sheet product went up 70% between Jan 08 and July 08 for some of us - surprise surprise, they have now ended up putting us all out of business and their order books are going down.
I wish I was a big company who could get my hands on government (our) money like the banks, Corus (perhaps) and every other big business that cries "help"
God help us all.

We need more British owned business. Would it not be more prudent for the government to invest in a brand new British Steel Industry and employ those workers losing jobs. This could be a starting point for British owned investments and a precedent for the creation of more industries that we so desperately need.

It is fundamentally wrong to throw money at foreign companies in the UK when we need to create our own for the sake of our future economy.

Retrained,

That sounds very promising for the longer term.
Any indication what is proposed?

However, I recall a poster commenting on trainloads of steel coming in from abroad recently.

Do not forget, lots of our manufacturing GDP is generated by companies owned by overseas conglomerates.

30 puzzling

''I was once puzzled but now I have serious debts.''

Well your not alone there. Except some of them were never even puzzled.

#32, hack-round:
Nice rant :0) - and a pretty good summary!

One thing worth adding, I think, is that in the process the West is ending up with most of the stuff (goods/materials etc) and the East with most of the money. If it carries on at this rate it could at least see an end to East-West military conflicts. Why invade the UK when you can just buy it? And at a knock-down price!

34. mrsbloggs13c2

'Steel is a cyclical business....
...I wonder where we are in the cycle?'

We are in the spin cycle. TATA are just flying kite after kite. PS Port Talbot is the most air polluted site in Europe as I understand it. They recently had a huge fine for H and S and worker deaths.

#24 - bearing the brunt in the UK are we? 2000 UK losses of 24000 UK jobs is 0.083%. 3500 of 42000 is 0.083% seems suprisingly fair to me! I agree normally our jobs are open season due to no protection, but not this time it seems...I bet no job losses at all at the French plants though!!!

So, Tata of India is poised to announce job cuts at Corus, but feels it is fair to ask taxpayers to give them a helping hand.

Didn't I just read that the owners of Jaguar and Land Rover were also looking for a helping hand, who were they again - ah, Tata of India.

Less well known, Legal & General outsourced 300 IT jobs to Tata Consultancy Services (part of Tata) last year, and this month they announced 130 of them are to go. Most of the roles will remain, but will be carried out by cheap offshore staff. Will they be asking taxpayers to help keep these jobs in the UK?

The silence is deafening.

I'm pretty familiar with this company and I can tell you that since the merger with Hoogovens Corus has been battling with a huge managerial and ' cultural identity' crisis. The two companies never really managed to fully merge and the end result was a company that couldn't see past the endless testing of new management 'initiatives' and consultancy programmes. If it wasn't for the easy money of recent years there'd have been job cuts before this imminent announcement. What is sad is that this is plainly a 'leak' from senior Corus management who were, as I understand it, to announce 'something' later in the coming week. What is sad, is the fact that under New Labour the UK manufacturing base has been undermined. There's little respect in New Labour circles for manufacturing. Now many good people will lose their jobs.

37 missus bloggs

...Will it be Tetley Tea next...

Could be, they have lost the flat cap and come over all Earl Grey lately dont you know, never a good sign.

When will CERTAIN PEOPLE learn a

BUSINESS IS FOR LIFE NOT JUST CHRISTMAS.

I think we went through all his about a month ago, when it transpired that the alleged similar Netherlands scheme simply doesn't exist?

"Corus cuts are as much about the firm as the economy."
This is the problem with much of the USA and UK bail-outs is it not? What is not being said much is the way many companies and especially the banks knowingly charged right into these problems...what were they all thinking? What many citizens can't understand is what these groups thought was the "end game" plan. They seemed to just go for broke and didn't seem to care who lost and paid for this mess. Are these people so RICH they just didn't care, did they put so much protection funds away for themselves they knew they would be safe, no matter what, if these companies fell and our nations went broke? Now our governments want the people, they used and hurt, to pay MORE for these companies and their crimes. There sure is something rotten behind this entire economic breakdown, it goes way beyond bad, greedy business. There were/are all kinds of rules and safegaurds, is this treason then? Citizens appear to be left totally defenseless. I was taught the elected officials in the USA and UK were to work only for the good of people who elected them, where are they?

Back in September last year steel prices were at an all time high (double the levels of mid 2007). I regularly purchase steel containers and at the moment prices are still too high. That's what you get from a market with virtually no competition!

It’s all too easy for companies to make job loss announcements and blame the downturn in the economy, but I believe this is simply a case of Corus protecting its high margin profits.

#37:

The money most likely came from banks and wealthy investors. These tiger economies have achieved such rapid growth by running massive leverage.

#7 and #15 have it, sadly. Britain needs a domestic steel industry, the knowledge and infrastructure at least, but I am not sure how much production is feasible in the foreseeable future. Where would we stockpile unused steel, now that the construction bust is going global? Production cuts are inevitable in the face of weak demand. I think the focus has to be on far-sighted preservation of a core of infrastructure and expertise so that we may take advantage of the recovery many years from now, rather than a short term propping up exercise at present capacity.

I agree, a windfall tax on city bonuses over the last 10 years is required to support those hard working individuals who actually have jobs with tangible benefits. These industries will be required to support us when the recession ends.
It is interesting to see support for a windfall tax gaining ground on Robert's blog. This should serve as a warning to those considering such reckless lending in the future, that high risk financial pursuits resulting in short term gain but long term national bankruptcy must not be funded through tax revenues.

So the government will soon own not only all the banks, but our manufacturing companies as well (surely the govt will want a stake in Corus for subsidising its work force and training budget?).

Looks like 'New Labour' will soon have achieved its ultimate objective - total control of everything in the UK.

Don't tell me you didn't see this coming!!

Maybe a few could be re-trained to be BBC blog moderators? There would seem to be a shortage :o)

Robert, Me thinks the steelmakers doth protest too much. As a UK manufacturer, we have had to live with massive increases in the price of steel since 2004. It just about finished our company but we are hanging on - god knows how. Then between September 2007 and September 2008 our buying prices for steel products doubled yet again. Since then prices have indeed fallen but they are still above the September 2007 levels.
As with oil, I believe the steelmakers are intentionally cutting back on output to keep their very good margins in place until the Chinese economy comes back on line.
As with oil however, there greed is in danger of killing off their customer base for a long time to come. I wonder how much of this is down to wanting to get in the queue behind banks, carmakers for a free state handout. Beats working for a living!!

Robert,
There was an over-capacity issue in this industry before the global downturn took its grip, as you said. It faces not only structural adjustment to reduced demand for its products but also carbon credit liabilities if it cannot invest large costs in carbon reduction technologies.

Unions have been reluctant to look at pay-cuts, have they? Peter Mandelson does not want to 'chose winners and save losers'.

How does the wages top-up work? I have seen reference to a suggestion that HM Govt picks up 70% of the wages bill, the company the remaining 30% - argument being HMG would pay the unemployment benefit if it didnt act. But every business could say this knowing that it could be a good way to avoid redundancy costs and have HMG subsidise it wages costs.

Peter Mandelson sees us developing into a value-added, knowledge-led economy - how does Corus qualify and to what end are the workers being re-qualified.

6 months until steel demand recovers seems a remarkably optimistic timeframe, which could extend the taxpayer commitment.

What's the policy here so that all businesses and workforces know where they stand?

Does Corus donate to the party? If it's in trouble , let it go . Better to wait till the recession's over and Gordon Brown is long gone before spending any more money on a dying industry. Then perhaps the new government can finance a new efficient steel industry owned by and profitting Britain. In the same vein , the time has come for British companies outsourcing work to Asia to be taxed heavily for the privilege. Why should the British taxpayer subsidise jobs abroad ?

We operate a free market, and allow foreign owners to buy up british companies.
It seems to me that a lot of other countries have control over who can own their large companies.
So then we are at the mercy of foreign businessmen looking after the employment interests in their home country first and then making any redundancies and closures here.

I truly hope that GB et al don't simply stump up the cash to top up wages, but rather use the money to retrain those workers in some alternative trade. At least that way taxpayers money is being invested in the future of this country and is not simply propping up some foreign-owned company which doesn't feel obliged to shoulder the burden of either paying full wages or redundancy. The inclination of large companies to threaten job losses to get their way when profits fall is highly divisive and we need to send a strong message that UK interests come before those of other nations.

Tata can re-train it's own staff if the business is viable, this is just them trying it on! Well who can blame them they are businessmen and spotting an opportunity with the shower that make decisions on our behalf.

#44 - show your working!

2,000 jobs out of 24,000 is 8.3%, not 0.083% as your calculator told you it was (you divided 2000 by 24000 but then forgot to multiply that answer by 100 to obtain the percentage!).

I'd say 8% is actually quite a high proportion of the workforce...

Woops! Type correction in #30.

'I was once puzzled but now I have serious doubts."

44. At 5:43pm on 25 Jan 2009, borophil wrote:

"#24 - bearing the brunt in the UK are we? 2000 UK losses of 24000 UK jobs is 0.083%. 3500 of 42000 is 0.083% seems suprisingly fair to me! I agree normally our jobs are open season due to no protection, but not this time it seems...I bet no job losses at all at the French plants though!!! "


No wonder we are in trouble if our sums are so far out.


Bring on the engineers.

#
Who's who: China’s politburo

* Hu Jintao, 62, president of the People’s Republic of China, graduate of Tsinghua University, Beijing, department of water conservancy engineering.

* Huang Ju, 66, graduate of Tsinghua University, department of electrical engineering.

* Jia Qinglin, 65, graduate of Hebei Engineering College, department of electric power.

* Li Changchun, 61, graduate of Harbin Institute of Technology, department of electric machinery.

* Luo Gan, 69, graduate of Freiberg University of Mining and Technology, Germany.

* Wen Jiabao, 62, premier of State Council, graduate of Beijing Institute of Geology, department of geology and minerals.

* Wu Bangguo, 63, graduate of Tsinghua University, department of radio engineering.

* Wu Guanzheng, 66, graduate of Tsinghua University, power department.

* Zeng Qinghong, 65, graduate of Beijing Institute of Technology, automatic control department.

45. ronapple

Re Tata bidding for UK IT work, getting it and then offshoring and dumping UK staff.

I do not think this is the first time this has been raised as an issue and whilst I cannot be sure I thought another UK company had subcontracted to Tata, or moved an entire IT support division to Tata with similar outcomes. Perhaps Tata would like to post comment here to clarify.

Ken Clarke on. the Andrew Marr show this morning
This was a truly enlightening interview on how he sees the state of the economy.

There are and still will be a broad sector of good businesses still here at the end of the depression.

New businesses will be created and Britain will again get back on its feet.

Well worth a watch if you are feeling totally depressed about the present situation.

There will be one heck of a mess to sort out and it would be better if the Tories could get on with it now rather than waiting for this government to make it a lot worse.

I couldn't agree more.

#40. sosraboc

"However, I recall a poster commenting on trainloads of steel coming in from abroad recently."

With some hundreds or thousands of different steel specifications in use there is bound to be import and export. It would not be economic to make all specifications here.

Maybe all steel is equal in the eyes of accountants and economists. I can assure you that this is not the case for engineers who specify the stuff.

Post 42

Well said vegetable_grower - that is already happening who owns our companies supplies our gas and no need for war quite right

But the longer term point is this. back in the 1970 s one Prime Minister Callaghan persuade us to sell our slow cotton looms in Lancashire to India and Africa and Indonesia we were persuade by government grant to buy high speed German and Italian machines.

These temperamental machines were not bad with synthetic fibre but useless with natural fibres.

Now the one time best cloth makers in the world Lancashire produces next to nothing and the best cloth is to be found anywhere else in the world

The point is we don’t do basic needs any more.

So if we stimulate all those foreign economies they will supply our basic needs then as you say they will have our money but money itself is no use it’s a promise

So what will they want - all those things that make life better so the will buy all our high engineering skills and technical knowledge and learning design and sigh level skills in medicine etc

So the money will come back our way in exchange for what we do best

problem is you need to keep the basics going when you move on to the higher things people always forget that and let go the basics to work at some higher level but you cant maintain anything unless you ensure the foundations are always kept tip top sadly everyone always forgets the basics and so change consciously occurs and things go up and things go down.

We are forever tampering with the roof and forgetting to shore up the footings.

I have much sympathy for other people working in the steel industry, but we do not all work for Corus. Why should they benefit from government/BBC supported subsidies whilst the rest of us endeavour to work through this independently and unaided?I would like to know how unilateral support is an endorsement of a socially-aware government?

After all - why are they in this mess ???? As a stockholder, we have seen our profits slashed by Corus stockholder- lead initiatives as Corus manufacturing based companies hold firm.

We do not - can not - buy many products from Corus. We import materials from other countries and manufacturers as they refuse to give us a fair market price - selling predominantly to their preferred stockholders, offer unreasonable terms and are over protective of their market. Some customers using 'other' western european sources have allegedly looked to book material on Corus rollings to find them 'full' or 'unavailable'.

Maybe the 30% or so who walked out at ISTA (Intl Steel Trade Assoc) in December 2008 - disgusted at sheer audacity Corus seems to have to its own market - should give you some idea of how we despair.


Demand is down lets fight on a level playing field.

Corus' revenues are down 50% but the planned reduction in staff is only 10%. Sure that's a lot but given the circumstances Tata should be congratulated for not going further. It knows it is being scrutinised by a sceptic British public and this is an opportunity for Tata to enhance its reputation in the UK and show it is a good employer.

The wider context for this is the international trade agenda, where India is the main demandeur of bringing cheap skilled temporary migrant labour into the EU, including a demand to disregard the minimum wage, because it interferes with the 'comparative advantage' of Indian transnational corps, moving cheap labour around the world.

This is happening in the WTO context, in negotiations on the General Agreement on Trade in Services (GATS), but also through the EU/India Free Trade Agreement.

In the text for the latter is secret until negotiations are completed! For the GATS, Mandleson has already made the offer - on our behalf - he just hasnt told us.

There has been a great deal of promotion, by the UK govt, of trade with India over the last few years. The financial services corporations of the City, the majority of which are foreign owned, want access to investment in Indian services. There are big protests in India about all of this, by ordinary people, but we dont hear about them here, and we dont hear about the agreements either.

This is big business pitted against people everywhere, to drive down wages etc, adn increase corporate power.

If the UK is going to put in money, if TATA expects to buy in and then get subisidised cheap workers ( there wont be any end to it), just nationalise the firm.

It is imperative that we reverse this corporate running of the world - definitively.

48 alexandercurzon wrote:

"When will CERTAIN PEOPLE learn a

BUSINESS IS FOR LIFE NOT JUST CHRISTMAS."

But LIFE is actually the life of the product. Every product has a life cycle. No company lasts forever.

Even Rolls Royce went bust.

A word to the wise.

As each merger and takeover occurs, the senior management and in particular the CEO get a real buzz and the endorphins flow. They become addicted to the chase and the business/workers/economic justification is irrelevant. We have seen this globally over the last ten/fifteen years.

The companies grow and grow like Topsy and size becomes the measure. The upshot is that the company becomes unwieldy and internecine warfare starts.

Profitability is low and cost cutting is enforced as soon as the going gets tough.

The very bad news is that the going is now tough and governments are putting enormous pressures on companies to keep the pain as far as possible from the home markets.

Because UK plc is really the worlds whore and no longer a powerhouse, the pain is coming home to roost.

Sorry.

projects that could help CORUS and others etc.

and here is a little equation at the route for you to think about Mr Peston.

Some say History does not repeat itself but is does in the new labour universe

TSR2+ F111 = Jaguars&harrier + JSF.

Some of you will have to search the internet for the First part. But Denise Healey Him with the eyebrows and very few brain cells.

if they had Navalised the Typhoom (EFA) upgrades the Harries and Jaguars we would have the following

1) high class Jobs all the way down
to the shop floor.

2) demand for locally made Engineering products

3) Strategic independance from USA and Euroland

4) Export orders which we could have taken from the USA and Euroland

5) An Industrial stategy to keep us selfsuffuicent etc

6) build 3 Carrieers (corus would like that) build the original 12 T45's or more rather that the 6 we are only going to get.

And that is only in one industrial sector that has been hammered by GB+co.

Then apply that to Farming and other area etc, etc

If the worst of this is felt in Teesside it will be like losing ICI again. We are getting used to be being dumped on. Souterners mock the Northerners but it has always been said that before you mock someone walk a week (should be a year) in their shoes. I really don't know how much more bad news we can take - the Government have made such fools of this country that it looks as though we are losing the off shore work which was already agreed. However I am not being a NIMBY it will be just as bad for whichever area loses this amount of work.

Someone should write a history of the steel industry in this country - it used to be a massive employer, with very poor productivity and now it emplys relatively few people but is pretty efficient. A 40% cut in demand and a 50% reduction in price makes it almost certain that there would be substantial cuts in output.

The proposal that the gov't provides funding for retraining does seem a bit of a figleaf for what is a request for (hopefully temporary) subsidy to keep people employed in the industry.

If the slow down is temporary then this is no bad thing in the short term. It is probably better to subsidise jobs temporaily than have to pay unemployment benefit and the other social costs associated with job losses. However how temporary is temporary and what will happen if the exisitng market conditions are still in place in 6 months?

May I remind you of a quote attributed to Einstein that, for me, represents your failure to truly understand the position that the world and UK economy is in.

"Not everything that can be counted counts, and not everything that counts can be counted".

You are a great counter - just like most economists. But the real economy consists of much more than economists count. As you might see if you looked at some UN models related to measuring life and life values.

Your view of the world is very simplistic. This would not be worrying were you to be sitting on a sofa on your own in Liverpool. Unfortunately, the BBC has chosen to give you the status of a guru on the UK economy.

I think you are extraordinarily naive as a reporter. You lack breadth and depth in your analysis. You frighten people unneccessarily.

Had you thought of finding another more appropriate outlet for your journalistic skills? Following the Royal Family perhaps? Or comedy writing?

Let me know if you would like an introduction.

I agree that foreign owned businesses are now cottoning onto governent subsidy. They know that the 'subsidy or redundancy' ultimatum makes the government sweat.

Then the government doesn't have a bottomless pit of money - notice how the government when questioned on how they will get through this recession, has moved from saying 'we will do whatever it takes...' to 'we will do everything within our power...' - a subtle shift but one which signals the limits have been reached. Also the patronising phrase 'it is the right thing to do...' has thankfully gone quiet.

In truth, no government can outspend a recession in high cost geography. Rhetoric and politics aside, the recession will happen and many jobs will be lost, causing house prices to fall faster with its related consequences.

Remember when NULAB caused a fuss when they did something about CLAUSE 4 !!!! ... and got elected !!!

Well, what did it say?

Is it now being reintroduced?

What a clever trick!!

Can anyone remember what it was about?

The biggest emerging factor I can see in people I talk to--- is the idea that these bankers have left the table with winnings each year for over a decade...so while losing their job IS "losing their job"; it hasn't quite the same meaning as it is for the hundreds of thousands of non Bank execs now losing theirs----- without the cushion of £millions salted away over the last 10 years.

Obviously the amounts that can be clawed back in 'misgovernance' cases won't 'make any material difference'---but that isn't the point.

Nor will they be 'fair'.... which isn't here nor there.

Nor need they be excessively punitive...just downsizing execs assets to two times national median would do it...no need for prison sentences.

But they will give people a clear target for the very real feelings of anger growing across the country ... and this 'target' (conveniently) will divert the attention from the politicians...... which isn't a major 'good'.

The above is a bit 'tongue in cheek'.... but only a bit---and the main reason for doing them would be that seeing some kind of attempt at redressing the balance of material reward just might also remove momentum from extremist political parties (of all persuasions) who are lining up to try and exploit the situation---- and THAT would be a major good.

All these jobs going, yet the Government seems hell bent on giving any remaining jobs to foreigners as if the average poor Brit cannot possibly live without Johnny Foreigner doing all our work for us. We've reached a new level of sickening self-loathing that really does have to stop:

https://www.telegraph.co.uk/news/uknews/4324382/Record-number-of-work-permits-handed-to-migrants.html

I'm confused. Either there is growing unemployment for all, or there isn't. Are migrant workers the only ones not being made redundant, then? Are these migrant workers - for however long they may be here - "British"? Yea, right. I'm assuming that's what Gormless Brown meant when he said he'd give British jobs to British workers. If this wasn't bad enough, we have that French-run powerplant setting up in Britain but utterly refuses to hire local and qualified workers, in favour of bloody Poles and Portugese. Who the hell benefits from globalisation in this country? NOT US! Apparently it is neither illegal to hire foreigners in favour of locals in the UK, or sack British workers, but no-one can tell me that almost every other developed nation doesn't have better protection for its workers than we do. Britain's inability or unwillingness to protect its workers' rights is legendary.

I'd like to know what proportion of the projected 3 million employed will be foreign workers, and what proportion will be "indigenous" Brits. If they hardly register in the figures, then either they are ridiculously qualified, or they're being handed jobs in favour of indigenous Brits because of their relatively cheap labour (like usual). One would assume that in an economic crisis affecting the UK, it would affect all workers, not just some, regardless of where they come from originally. But something tells me this is not the case...

PS: Will someone please just explain to me how in the hell unemployment can be rising, while the number of migrant workers being brought in from outside the EU is now higher than the levels of 1997? It is utterly counter intuitive and non-sensisical. Unless of course, it is indigenous Brits who are being sacked and sidelined in this "economic crisis"...

Where is all the steel for building the Olympics coming from?

What happened to those two big aircraft carriers we were going to build?

What happened to the fiscal stimulus?

Are we going to end up importing steel with sterling on the ropes?

Does this government possess the capacity for joined up thinking?

I can only answer the last question and that is in the negative.

Time for change!

@50 "There sure is something rotten behind this entire economic breakdown, it goes way beyond bad, greedy business."

You do have to wonder about dark forces at work, to destroy the UK.

Let's just hope Kenneth Clarke asks Mandy the necessary hard questions about this latest outbreak of concern for our future, emanating from Tata. Their desire to retrain the workforce at taxpayer's expense has a hollow ring.

Why not just build prisons using Corus steel, for the bad times ahead?

52. WerringtonSilent

''I think the focus has to be on far-sighted preservation of a core of infrastructure and expertise so that we may take advantage of the recovery many years from now, rather than a short term propping up exercise at present capacity.''

Firstly I am not against taxpayer money going into business. I am against it going in for political reasons. I am against it going in too large. I am also against it going into multinationals who appear to play one country against another and can move money about internationally easily.

But - How do you determine a 'viable core of infrastructure'. That is the whole question. The government that has no skill in this area? The business that is in trouble? The establishment economists who have such a good track record?

Tata are not talking at present about shutting down UK operations just trimming. this leaves an activity, and plant capability.

There is virtually no evidence of strategic intervention in other areas now bemoaned as critical eg manufacturing and technology for decades. It appears to have been a wholesale prop or wholesale drop. I do not expect much different this time around.

Why is steel production so important to the UK. Why is steel more important than any number of other activities.

Why does Tata seem to think its entire workforce need retraining. It is a bizarre proposition. What other industry can you think of that says its entire workforce needs retraining for 6 months. In what way does this retraining ensure the continuation of the operation in its current short term size.

Additionally Tata seem to be getting a name for flying kites and queuing for handouts.

I've heard just too much rhubarb from multinationals and how much they can do. Look at the LG plant in S Wales, to name just one. Largest single investment in Europe. Massive taxpayer input. An entire department set up at the University of Wales training graduates to LGs spec. Gone before it opened.

Surely when everyone has had a chance to blame everyone else it all comes down to good old fashioned housekeeping!

The fundamentals of correctly priced markets with enough competition to encourage R and D along with sensible profits for companies (countries) that aren't mortgaged to the hilt are the backbone of progress.

No government on on earth can do more than fiddle round the edges and hopefully encourage economic equilibrium to return a wee bit qucker!

This trough we are in is part of the natural cycle of things and should serve as a reminder that financial basics apply to everyone. The globality of this mess will be repeated many times before we get to real stability.

Couple of things, unfortunately the very people that the labour party was set up for , it is hurting the most, the very well off , will remain well off, and the masses will suffer if it gets as bad as some think it will, either way it will be the masses and not the well off that will end up paying for this mess.

Those who have suffered in the past must be turning in their graves seeing the same things happening time and time again. Was the UK ever out of the doldrums ?

It will be the hollow words of the ruling classes that will ring in the public's ears like they did with King George , like the Jarrow men who were turned away from Parliament, who were forced to move by the soldiers many of whom would have been outraged to know that many of these men were WW1 veterans, bottom line the not well off will suffer again, and for a lot of people if they think they are not well off now, are in for a shock if they are to live like their ancestors did prior to the 1950's

Anyway here is a thought, for years UK industry was shipped offshore to other countries, because of lack of investment and poor insight, how about we import these industries now, open up LCD and PC factories using the Chinese technology, and anything else we dont know , that's how they did it right ?

Once the country is over its much needed correction and debt payment, make these things, people will have to get used to less pay, but then the cost of living should be less so it will all be relative, any company that overcharges like it does now, will suffer a rapid decline.

And we will never be able to draw a line under all of this until those who were complicit in this mess answer for their mistakes and ill gotten gains taken off them, let the super rich suffer for a change.

4. At 2:24pm on 25 Jan 2009, AqualungCumbria wrote:
A foreign company losing jobs in this country should come as no shock.No doubt they will be shutting major plants if they dont get government help.

Be an interesting fight as all the remaining plants are in Labour heartlands.

Just another once core industry that we will have to import the products for in a few years when things pick up.




Yes...
RBS (Godro Bank) is committed to meeting 'targetted' Central & Local Government initiatives...

I may have no objections to this, but I want the honest truth...

No more Mandyspin

No more Godrospin

Once again Robert, an informative, insightful blog. I would just like to say thank you for making the seemingly incomprehensible - comprihensible. That being said, I am of the view that a positive mental outlook promoted within the media, even in these bleakest of times would help the public phsyce. What is your view?

44. At 5:43pm on 25 Jan 2009, borophil wrote: #24 - bearing the brunt in the UK are we? 2000 UK losses of 24000 UK jobs is 0.083%. 3500 of 42000 is 0.083% seems suprisingly fair to me!

Borophil - go and get your calculator re-calibrated. It's 8.3% not 0.083% (which would only be 20 people)

7 good years, then 7 bad...

The moral of this very old story: save some of the profits of today to weather the storms of tomorrow.

I'm not religous but I see the common sense of the story of Joseph!

Corus, where are your reserves?

This soft touch government will pay up as they are scared.

Strange that with a weak pound massively helping exporters that it is the UK that has to bear the brunt of the foreign owned company's redundancy.

Jobs are being lost everywhere why does this Government not look at simple solutions to the crisis we are in? Bring back tax releif on mortgage interest up to £100,000 for the next 3 years and thereafter on £50,000 for the next 5 years. Just think what this might achieve - restoration of the housing market/construction industry and money straight to the pockets of people in need rather that hoping the "Banks" wil do this!

Regarding outsourcing IT to Tata Consultancy Services, Corus have also done this. It was a "big surprise" when the contract renewal for IT development was up in 2007 that Capgemini lost the contract to Tata, bearing in mind Tata had just bought Corus!

Since the downturn, Tata Consultancy are already talking of redundancies to UK staff and more work being offshored to its operations in India. The company has sold its soul to the devil for short term gain. Short term thinking means UK job losses, means fewer people buying cars, means less demand for steel. New world order? Possibly.

PS. I wish mention of this article would stop referring to "24,000 steelworkers". Many of the people who work for Corus are highly skilled professionals in finance, sales, IT (what's left of it), etc. This isn't just a case of unskilled people losing their jobs, just like banks aren't solely made up of desk clerks. There are many well paid jobs in Corus and these redunancies will hit the local economies very hard indeed.

This is all getting a bit silly. Come on, let's get real:

Banks collapse - Bail out plan

Banks collapse again - further bail out

Industries collapse - bail them out too?

This whole system has to collapse, it's not sustainable. We are trying to prop up the final years of the Industrial Age, this is not sustainable, we have reached the limits of our planet's resources.

Profit as a concept has to go, in order to do this we have to remove the need and want or it. Our golbal monetary system will not serve us going forward.

----------

In the nineteen fifties my father lived on a small-holding in the West of Ireland, they had 5 acres of poorish land. They had chickens, a few goats, one cow and a sow, and of course they grew all their own vegetables. They raise turkeys and geese for Christmas and Easter etc.

Were they any worse off? Big question indeed... My father thinks not, I love to hear him talk of those days, especially how they all worked as a community.

The whole village brought the harvest in together, entertainment was shared and all took part. My Great Aunt provided goat's milk for all her visitors, it was her way of providing to the the community.

One chap in the village (sorry Dad I can't remember his name) had the only radio in the village and would listen to the daily news. The village (about 30), would go to his house every evening and he would relay the world events.

This wasn't that long ago! My Dad taught me as a child how to rear animals, how to grow vegatables, how to fish and how to live off the common land.

I work in Industry but had the foresight to not give up what I was taught. I keep chickens and grow my own veg. If I am pushed I can sustain myself, winter may be a bit difficult but I still have my old books on bottling and pickling food.

I don't think my ancestors had it that wrong, after all they survived to get me here.

Am I alone? Do we need to fundamentally review how we live?

Or am I just pipe dreaming?

TaTa Steel (quite literally) are not even interested in supporting their own car company, Jaguar/Land Rover; and have been trialing Aluminium body panels to be provided from within the UK. With this in mind it seems the future of steel making in this country is all but dead. Bessemer must be turning in his grave.

67
Thank you

Robert

Re:

'Corus feels it will have to reduce the pay of employees for six months or so, until demand for steel recovers. The company feels it's fair to request support from taxpayers for an increment to staff pay, because the alternative of making more employees redundant would lead to a rise in social security payments.'

The old fashioned names for this
kind of behaviour are coercion and blackmail - its amazing how so many the times the UK and its government is seen as a soft target by overseas investors. Steel making operations are comparitively easy to mothball the until if an when the market returns - my guess is that if we, the taxpayer, bail out Corus in the UK - this will only be the first round of job cuts and the government should stand firm, resist calls for hand outs to foreign investors and invest the money in local green jobs e.g use the steel plants for re-cycling - snatch and raid the assets of Corus if necessary - and put in funds from the Treasury UKFI for alternative new industry. No one goes to the Chinese dictators or any other country that I know of and says 'give me a pile of dosh or else' - they only dare say it in Britain.

This would be tough on the workers losing their jobs initially but better if the right things are done.

The government should ensure that any steel plants to be closed are immediately put to alternative use e.g. re-cycling plants, grow something/make something and get a government approved and financed loan for doing so - to replace the jobs lost - better to invest in sustainable local employment - street level intervention - doing the right things - new sustainable industry.

Too much talk of retraining for what? - You have to create the industrial infrastructure first - its no good retraining people if the jobs and infrastructure are not there.

Also, I suppose that Corus may already be subsidised by British sourced bank loans? But we taxpayers seldom get the full story?

Too many 'internationalists' seeking hand outs from the UK.

I think Nick Clegg is sounding good on this - I never thought I'd ever be agreeing with him but he sounded OK on this issue (A Marr this morning). K. Clarke sounds like he will join G Brown and wait for the city of London to recover, i.e. incredibly, the city of London is still seen by some as the main UK economic driver.

Needs a fresh approach - where are UKIP Green Party and 'others' ? - Can't the BBC speak with them as well?

Both of the the main UK political parties are stuck with 1970's HM treasury macro economic models and have no idea whatsoever?

I hope this government doesn't now send aid to e.g. China or other countries! Perhaps G Brown will refinance to cover this?

a bit of a go slow amongst the moderators

I think more detail is required from your "understanding" so that we actually know what is being offered.

Sounds to me that a business has been forced to grasp a thorny issue it hasn't wanted to up until now.

Robert

Why the need to tell us that Port Talbot is in South Wales?

Is it in case readers confuse it with another Port Talbot with a large steelworks in the UK?

Or, if the detail is for readers who are geographically challenged, could you also tell them where Scunthorpe and Teeside are located?

I am just wondering. I have heard that we have stockpiles of steel waiting to be shipped to China to be recycled. Perhaps it would be better for this recycling to be carried out here instead? Helping those affected at least in the short term.

Of course there is the problem of little demand due to a lack of manufacturing. But since only a few months ago there was a shortage, when the market does pick up, there will be product waiting to be shipped.

Some similar could be done with all the other material waiting to be recycled that we are now paying to have stored.