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Tata Steel could axe 500 jobs

Tata Steel has said it could cut around 500 jobs under plans to restructure the part of its British business that supplies the construction and engineering industries.

Europe’s second-largest steel producer, which employs more than 1,500 workers in the North East, says 40 posts could go at its Redcar site.

The biggest blow would come at its Scunthorpe plant, with 340 jobs set to go, and another 90 at Workington.

Changes to its long products business - which makes tubes, rails and rods, used in many industrial sectors - will affect mainly management and administrative jobs.

It blamed a prolonged downturn in demand, particularly for construction steel in Britain, a market which is at about half of 2007 levels.

Karl Koehler, CEO of Tata Steel’s European operations, said: “European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years.

“On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry.”

The $500-billion-a-year steel industry, a gauge of the health of the global economy, has suffered from a drop in demand from austerity-hit Europe and worries about the outlook for the Chinese economy.

Tata has battled tough conditions in Europe almost since taking over steelmaker Corus in 2007, just before the global financial crisis, and these cuts follow a major restructuring of its long products unit in 2011, with the loss at the time of about 1,500 jobs in Britain.

Tata said then that it was mothballing parts of its Scunthorpe plant to refocus on high-value markets.

This was posted in Bdaily's Members' News section by Martin Walker .