TATA and the future of steel making in Britain

[Hope]

As we all know, the stell industry in the UK is going through a really tough time, with TATA being the latest to pull out.  Living in S. Wales as I do, the 'local' news is all about the plants at Llanwern, Newport, Trostre (Llanelli) and - of course - Port Talbot.

Much has been made about the idea that stell making should nbe regarded as a 'foundational industry' - but how does one have a foundational industry that loses ~£1million a day - and has to buy all its raw materials in from abroad?  Clearly, 150-odd years ago, all the raw materials were available from within the UK, so the idea of such an industry made sense. 

From a different aspect, how ought the UK to be replacing all these heavy industry jobs?  Is soft industry - call centres and financial services - really all there is?

[Hope]

An interesting article from the BBC's Newsbeat section -
http://www.bbc.co.uk/newsbeat/article/35933173/steel-v-banks-why-theyre-different-when-it-comes-to-a-government-bail-out

[Shaker]

As we all know, the stell industry in the UK is going through a really tough time, with TATA being the latest to pull out.  Living in S. Wales as I do, the 'local' news is all about the plants at Llanwern, Newport, Trostre (Llanelli) and - of course - Port Talbot.

Much has been made about the idea that stell making should nbe regarded as a 'foundational industry'

Oh no! What are we going to do without stell? 

[Hope]

Oh no! What are we going to do without stell? 

Whoops.  Thanks for that Shakes.  I corrected those spelling mistakesand then must have pressed the wrong button, so that the changes weren't saved.  Spelling mistakes or not - do you have an opinion on the issue?

[Shaker]

Nah.

[jeremyp]

Apparently you can buy steel from Sweden that is cheaper and and better quality than steel from Britain. Either we invest enormous quantities of money to rectify that situation or we let the steel industry die. There's also a third option which is to subsidise the industry to keep the workers in jobs. That option is likely to be the most expensive one in the long term and avoids confronting the real issues.

[L.A.]

The fact of the matter is that 'basic' steel is just another commodity and if we can't make it competitively we are better to import it.

Of course 'Green' taxes aren't doing the British Steel industry any favours.

[Jack Knave]

It's a good question and I'm not sure of the answer, but I feel we need to keep our industries and to build them up. Making stuff is what runs economies and creates real capital. Instead successive governments have allowed our industries to be run down and closed, and this is a ludicrous approach.

What TATA are doing, according to an academic interviewed on the BBC, is consolidating their industry in Europe so that all the trade and orders from Port Talbot go to another plant; I think in Sweden. They don't want to sell PT they want to close it down for good because they don't want anyone else competing with them - I believe PT creates specialist steel for certain types of applications.

[jeremyp]

It's a good question and I'm not sure of the answer, but I feel we need to keep our industries and to build them up. Making stuff is what runs economies and creates real capital. Instead successive governments have allowed our industries to be run down and closed, and this is a ludicrous approach.

There's no point in making stuff that nobody wants to buy at a price that makes it profitable.

[Étienne d'Angleterre]

There's no point in making stuff that nobody wants to buy at a price that makes it profitable.

The problem is that it is hard to calculate the true cost. I'm sure the accountants look at the cost to Tata, which is their job of course, but there is a wider social and financial cost of losing industries. Not saying that we should automatically be in the steel industry but if we can't compete we need to think about what else we are going to do.

Not an easy issue to deal with though.

[L.A.]

The problem is that it is hard to calculate the true cost. I'm sure the accountants look at the cost to Tata, which is their job of course, but there is a wider social and financial cost of losing industries. Not saying that we should automatically be in the steel industry but if we can't compete we need to think about what else we are going to do.

Not an easy issue to deal with though.

I'd say that if you are producing a basic commodity at a higher price than everyone else then that situation is unsustainable. Maybe there are ways that costs can be brought down, but you can't run any industry with those kinds of operating losses indefinitely.

Yes, there would be social costs associated with closure, and those problems would need to be addressed.

[Étienne d'Angleterre]

I'd say that if you are producing a basic commodity at a higher price than everyone else then that situation is unsustainable. Maybe there are ways that costs can be brought down, but you can't run any industry with those kinds of operating losses indefinitely.

Yes, there would be social costs associated with closure, and those problems would need to be addressed.

I don't disagree. We have had issues in the steel industry for years though, and if it can't be produced at a competitive cost then we should have been identifying what would replace it rather than just wait for the inevitable.

There are also financial costs associated with closure as well as social ones.

[L.A.]

I don't disagree. We have had issues in the steel industry for years though, and if it can't be produced at a competitive cost then we should have been identifying what would replace it rather than just wait for the inevitable.

There are also financial costs associated with closure as well as social ones.

I don't think there is any 'Good' solution, hard decisions need to be made and not fudged.

[Étienne d'Angleterre]

I don't think there is any 'Good' solution, hard decisions need to be made and not fudged.

Sadly, I think you are probably right.

[Gonnagle]

Dear Hope, hello are you there Hope,

Nationalise it, put time and effort in to it, make British steel the best steel in the world, specialise, tell the world our steel is the best on the market, what we don't do is turn our backs on all those workers, what better way for the government to show, We are All in it Together.

Gonnagle.

[L.A.]

Dear Hope, hello are you there Hope,

Nationalise it, put time and effort in to it, make British steel the best steel in the world, specialise, tell the world our steel is the best on the market, what we don't do is turn our backs on all those workers, what better way for the government to show, We are All in it Together.

Gonnagle.

Hi Gonnagle,

but would the world pay a premium price for the 'British' tag? - or would the taxpayer just end up with another British Leyland?

[Étienne d'Angleterre]

Hi Gonnagle,

but would the world pay a premium price for the 'British' tag? - or would the taxpayer just end up with another British Leyland?

I think the job in hand is to make sure it doesn't end up as another British Leyland. The differences with BL (well one amongst many) was there was a merger of many different companies with there own agendas. Hence the same car bagded as an Austin, Mg etc.

I don't think that is an issue at the moment with steel.

[L.A.]

I think the job in hand is to make sure it doesn't end up as another British Leyland. The differences with BL (well one amongst many) was there was a merger of many different companies with there own agendas. Hence the same car bagded as an Austin, Mg etc.

I don't think that is an issue at the moment with steel.

I think you could criticise  British Leyland on many levels, but the ultimate lesson is that a well meaning government can't resurrect a failed company.

[Gonnagle]

Dear Lapsed,

No, I honestly think we have moved on from the days of Leyland, we are more business savvy, me personally I would tell the steel workers your job is now in your own hands, the taxpayer will fund you but only for a limited period, not until they are in profit but until they can sustain themselves, the governments job would be to provide the savvy, help with contacts, let the very people whose future we are discussing make the tough choices, downsizing, redundancies, we as a country must show that we are all in it together.

Gonnagle.

[L.A.]

Dear Lapsed,

No, I honestly think we have moved on from the days of Leyland, we are more business savvy, me personally I would tell the steel workers your job is now in your own hands, the taxpayer will fund you but only for a limited period, not until they are in profit but until they can sustain themselves, the governments job would be to provide the savvy, help with contacts, let the very people whose future we are discussing make the tough choices, downsizing, redundancies, we as a country must show that we are all in it together.

Gonnagle.

I think don't think nationalisation is a good solution even in the short term. The way I see it, the only hope for the British steel industry is to reduce costs, and that would mean cutting green taxes for the industry.

IF that could be done AND the unions co-operated in restructuring AND a new private sector buyer could be found - THEN there might be a chance.

[jeremyp]

Dear Hope, hello are you there Hope,

Nationalise it, put time and effort in to it, make British steel the best steel in the world, specialise, tell the world our steel is the best on the market, what we don't do is turn our backs on all those workers, what better way for the government to show, We are All in it Together.

Gonnagle.

Nationalisation doesn't have a very good track record of producing world beating heavy industry. What makes you think it will be different this time?

[Jack Knave]

There's no point in making stuff that nobody wants to buy at a price that makes it profitable.

You are a myopic twit!!! You sound like Cameron and co. It won't be like that for ever. And if we don't have our own and need steel when the price is high because of demand is high then we will be stuffed. That's why we need to keep ownership of all manger industries.

And our Green policies are making power far too expensive which is why it costs so much to run these industries, making them less competitive.

[jeremyp]

You are a myopic twit!!! You sound like Cameron and co.

It's so predictable: somebody says something you don't like and can't refute, so you insult them instead.

It won't be like that for ever.

Up thread, I said there were three alternatives.

1. invest millions (billions?) to make Port Talbot competitive

2. Let it die and invest in industries we are good at.

3. Invest millions (billions?) subsidising the plant as a charity to its workers.

And if we don't have our own and need steel when the price is high because of demand is high then we will be stuffed.

We would be stuffed anyway. There's no rule that says British steel companies need to sell to British industry at a discount.

That's why we need to keep ownership of all manger industries.

That ship sailed many years ago.

There's absolutely no reason to manufacture steel in this country unless we can do it more cheaply than elsewhere and we can't.

[Shaker]

Bollocks to the global environment (in the guise of 'green policies/taxes') seems to be the take-home message here.

Certainly from Jack Knave anyway.

[Jack Knave]

It's so predictable: somebody says something you don't like and can't refute, so you insult them instead.

Up thread, I said there were three alternatives.

1. invest millions (billions?) to make Port Talbot competitive

2. Let it die and invest in industries we are good at.

3. Invest millions (billions?) subsidising the plant as a charity to its workers.

We would be stuffed anyway. There's no rule that says British steel companies need to sell to British industry at a discount.
That ship sailed many years ago.

There's absolutely no reason to manufacture steel in this country unless we can do it more cheaply than elsewhere and we can't.

You didn't say those things in the post I replied to. What I said was correct for the post it referred to, including your myopia and dumbass statement.