Last minute save for the British steel industry

Seconds before the whistle blew on the fate of Tata Steel, and with it the British steel industry, there has been a last-minute save in the form of union negotiations. And not a moment too soon. Back in March of this year, Tata Steel announced that it was going to sell off its UK operations in the face of increasing competition from China, dwindling demand and the strong pound:  Tata Steel to sell. Six months later, however, it is a different story.

In an unsung victory for Brexit campaigners, the weaker pound post-Brexit has actually eased the pressure on Tata Steel and strengthened negotiations between the trade unions and Tata Steel over pension provision (the biggest financial burden for the company): Tata Steel Saved

Tata Steel has been Port Talbot’s economic linchpin for decades (4,000 people work for the company in Port Talbot alone). The town itself forms part of the iconic industrial landscape of South Wales and represents perhaps the last great bastion of British steel.  For the whole of Wales, steeped in a history of industrial peaks and troughs, it spells a very welcome shift in an alarming trend from primary and secondary industry into the tertiary sector and an associated growing dependence on imports. In total there are more than 6,300 Tata steel workers in Wales but the supply chain dependent on Tata steel stretches right across Wales with an estimated annual revenue in excess of £3 billion. The potential loss of Tata Steel would be devastating to the Welsh economy.

As ever, the repercussions of such commercial decisions are a stark reminder of the power of Trans National Corporations (TNCs also known as multinationals). Their boardroom decisions can cost thousands of jobs overnight and, in the case of Port Talbot, spell the doom of a whole town.

It must have been a painful negotiation for the Trade Unions but, with the whole British steel industry in terminal decline, there are few viable alternative sources of employment available for the plethora of steel workers who would have been laid off. Ultimately, the long-term cost of unemployment outweighs the price of a reduction in pension pay outs and there are, no doubt, hundreds of previously distraught families now preparing for Christmas with their minds at ease.

Best of all is the talk of not only halting the sale of Tata Steel, but of investment in the plants’ infrastructure, furnaces and production line, all promising a future in the steel industry that just a few months ago would have seemed a desperate flight of fancy.

The chimneys of Port Talbot are here to stay after all…

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Image of Port Talbot taken from http://www.porttalbotcameraclub.org/images/Placeholder, accessed 10/12/16

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