British Steel on the verge of collapse

[William of Walworth]

Excellent and thought-provoking thread, I've only just seen and read it

I'm going to chat ASAP with a Tata-employed mate in Port Talbot -- he's a skilled engineer there ... That perspective could be interesting ...

 

[steeplejack]

Given the you awarded the voters of Scunthorpe you clearly think they’ve made a fundamental error/stupid decision.

So, who should they voted for? Who speaks for their interests? Which party would unpick the Tata/thyssenkrupp monopoly project that threatens all of the remaining mills in Britain? Which party has a coherent industrial plan?

I dont think the vote for BP will help at all, but you’re right that no other party has a coherent industrial strategy either.

This is a global issue that would require intervention on a trans-national basis.

Ive seen Mittal’s works in Zenica in Bosnia-freely polluting all and sundry without anything other than notional checks and balances. The River Bosna is so filthy with by products it’ll be polluted for many centuries. People breathe pure poison ten months a year there. The other times, the works are not working.

The point of this aside? I think the regulation and development of steel has to be done on an international basis. Voting for a party whose leading members couldnt care less wont help inching towards that position over time.

International regulation and control wont come though and the EU are quite happy to let the Mittals and Krupps of the world prosper at everyone else’s expense.

I am always interested to learn from ppl like yourself who have direct experience of the industry. What would you do to unravel steel cartels / oligopolies and could it work or is it simply the case that the regulated deindustrialising “West”, with small scale producers, will always lose out to producers less troubled by how steel is actually made?

 

[alex_]

Given the you awarded the voters of Scunthorpe you clearly think they’ve made a fundamental error/stupid decision.

So, who should they voted for? Who speaks for their interests? Which party would unpick the Tata/thyssenkrupp monopoly project that threatens all of the remaining mills in Britain? Which party has a coherent industrial plan?

You are right, no one really has a good answer to give them. But they’ve voted for a party who will clearly be quite happy to throw them to the wolves.

At least in the eu they’d get some regeneration funds, the tories are hardly famous for investing in ex industrial heartlands.

Alex

 

[WouldBe]

Leaving aside the question why you would want the government to pour good money after bad into a totally fucked company, it's not that simple.

Any post brexit EU trade agreement will include anti state aid provisions. Some subsidies aren't allowed under WTO rules and others will attract anti subsidy duties.

Is it totally fucked though? The reasons they wanted a loan from the government was to pay for EU expenses they wouldn't have had to pay if the MP's had respected democracy and we had left the EU on the 29th Mar.

As I said on another thread if the government aren't allowed to 'subsidise' British steel because of EU rules then why can't Network rail pay a 'deposit' on the £200m order they have with British steel?

 

[steeplejack]

The business isn't totally fucked, and I think the govt is quite optimistic of finding a buyer. Liberty Steel, which specialises in recycling, has been talked up as a possible buyer and they are in the town already.

S&S's earlier point about a takeover leading to further redundancies/ "efficiencies" and wage cuts for those that remain sadly seems very likely.

 

[Drarok]

[…] if the MP's had respected democracy […]

I hate this oft-repeated line. There was, and is, no requirement off the back of a referendum for the MPs to change law or enact anything. It was an opinion poll, nothing more.

 

[steeplejack]

Brexit will not save troubled steel industry says UK trade body

 

[DownwardDog]

The business isn't totally fucked, and I think the govt is quite optimistic of finding a buyer. Liberty Steel, which specialises in recycling, has been talked up as a possible buyer and they are in the town already.

S&S's earlier point about a takeover leading to further redundancies/ "efficiencies" and wage cuts for those that remain sadly seems very likely.

The government has already pissed 120m up the wall on this company this month in a "loan" which will never be paid back. When is it enough?

 

[steeplejack]

The government created the conditions where the loan was necessary in the first place. Much as it may not seem like ti now, Brexit won't last for ever.

 

[Boris Sprinkler]

Just a tip...

Aviation fuel.

 

[WouldBe]

I hate this oft-repeated line. There was, and is, no requirement off the back of a referendum for the MPs to change law or enact anything. It was an opinion poll, nothing more.

Those MP's who voted against their constituents 'opinions' may be in for a shock come the next general election.

 

[Badgers]

 

[Smokeandsteam]

The BP policy seems to envisage public investment and public/private ownership including share ownership amongst the workforce. Most importantly , along with labour, there is a growing consensus that the company must be saved.

If (or more likely when) the Tata/ThyssenKrupp merger vehicle is signed off by the EU (with the closure of Port Talbot part of the measures demanded by the EU) then these plants will be among the last remaining.

Brexit party plans 'John Lewis-style' rescue of British Steel

 

[Smokeandsteam]

Given the likely closure of Port Talbot when the EU waive through the Tata-ThyssenKrupp monopoly merger this looks like the end of steel making in Britain.

The fact that the complete loss of a key productive industry, necessary to the basic functioning of an economy, isn’t dominating the Tory leadership election and barely flickers on the screen of media and public consciousness (outside of the communities devastated by it) is massively telling.

The tories refusal to provide loan guarantees to allow for the installation of electric arc furnaces and the removal of the blast furnace should be seized on by labour and used to hammer them again and again

British Steel bidder loses interest as UK fails to offer support

 

[steeplejack]

"One week to save Scunthorpe Steelworks"

All the signs are that the UK government will simply shrug and let the plant close.

 

[cupid_stunt]

"One week to save Scunthorpe Steelworks"

All the signs are that the UK government will simply shrug and let the plant close.

What government?

 

[Smokeandsteam]

"One week to save Scunthorpe Steelworks"

All the signs are that the UK government will simply shrug and let the plant close.

More likely the Insolvency Service will allow the private sector vultures circling the opportunity to cannibalise the lingering remains. Even though I should know better I’m raging about the abysmal response from labour and the steel unions. As usual I fully expect them to come out fighting at the precise moment it’s too late to fight

 

[steeplejack]

As I remember Corbyn said it should be nationalised on the day the insolvency was announced, and diddly squat since. Nick Dakin appears to be trying his best but flying a bit of a lone kite.

Meanwhile the Tory Party wanks itself into a frenzy over whether Boris and his bidie-in have kissed and made up, and it's left to Richard Tice and the Brexit Party to fill the vaccuum with an attempt at triangulating Labour and Tory policy on the subject in a public meeting at Glanford Park. The complete media disinterest in the subject, beyond the local papers, is genuinely astonishing. I am also fuming at the indifference.

Up to 25,000 people facing redundancy, a town facing a slow death, and the general response is total apathy.

 

[Smokeandsteam]

As I remember Corbyn said it should be nationalised on the day the insolvency was announced, and diddly squat since. Nick Dakin appears to be trying his best but flying a bit of a lone kite.

Meanwhile the Tory Party wanks itself into a frenzy over whether Boris and his bidie-in have kissed and made up, and it's left to Richard Tice and the Brexit Party to fill the vaccuum with an attempt at triangulating Labour and Tory policy on the subject in a public meeting at Glanford Park. The complete media disinterest in the subject, beyond the local papers, is genuinely astonishing. I am also fuming at the indifference.

Up to 25,000 people facing redundancy, a town facing a slow death, and the general response is total apathy.

Labour should be all over this. The questions thrown up go to the heart of their economic policy. Their response has been truly abysmal. The steel unions, as usual, are hand wringing and appealing to a morality that simply doesn’t exist. It’s an absolutely shameful state of affairs

 

[steeplejack]

Reports in today's local papers suggest final deadline for bids approaching, with closure contingency being planned.

However, internal e-mail suggests this is media "sensationalising" and that patient work will continue throughout the summer to find a buyer. The "Special manager" still seems quietly optimistic about a buyer being found (that said, smokeandsteam's analysis that vultures will be allowed to circle and pick off appetising parts is also currently playing out, too.)

Network Rail have already bid for the railmaking part of the business in the event the plant goes.

 

[Smokeandsteam]

Reports in today's local papers suggest final deadline for bids approaching, with closure contingency being planned.

However, internal e-mail suggests this is media "sensationalising" and that patient work will continue throughout the summer to find a buyer. The "Special manager" still seems quietly optimistic about a buyer being found (that said, smokeandsteam's analysis that vultures will be allowed to circle and pick off appetising parts is also currently playing out, too.)

Network Rail have already bid for the railmaking part of the business in the event the plant goes.

View attachment 177520

Here is the statement from the senior steward at the works:

'Business as usual' for British Steel after bid deadline reports

My concern, that there will be cherrypicking of some parts of the operation, remains a real risk. This is, I believe, is what the contingency planning centres around.

There needs to be a serious upping of effort by the unions and labour for commitments about the installation of electric arc furnaces, lower energy costs for a fixed period to allow a ‘just transition’ to hydrogen technology that delivers zero emissions and for the business to remain fully intact.

 

[Smokeandsteam]

Extremely interesting. The Tories intervening in the ‘operation of the market’ would have been absolute anathema just 5 years ago. It indicates how much Labour has shifted the debate on the economy and how vulnerable the Tories are to attacks on the issue. Good news for BS workers:

UK government agrees £300m rescue package for British Steel

 

[Dogsauce]

They’re throwing money around like nobody’s business at the moment. Either there’s an election coming or they know that by the time they make good on the promise the post-Brexit pound will be worth about 1% of the current value so not as generous as it sounds.

 

[Smokeandsteam]

They’re throwing money around like nobody’s business at the moment. Either there’s an election coming or they know that by the time they make good on the promise the post-Brexit pound will be worth about 1% of the current value so not as generous as it sounds.

Yes, the impending election is undoubtedly a factor, that’s undeniable. But it’s still a significant shift when the Tories are prepared to intervene a basic way productive industry rather than actively facilitate active disinvestment by their rich friends. And as such it reflects how much McDonnell has managed to shift the entire framing of the debate. Of course, the details of the investment, how it’s structured and what sort of bail out materialises is not yet clear

 

[steeplejack]

Grimsby Telegraph reports that a takeover deal led by Turkish Ataer Holdings (major investor: Turkish military pension fund) will see them take control at British Steel, paying £70 million and benefitting from a targeted government support plan.

If true, expect a thatched old Etonian buffoon to show up soon in Scunthorpe claiming all credit, then mysteriously vanishing when "regrettable but unavoidable efficiencies" are announced by the new paymasters.

 

[Smokeandsteam]

If true, expect a thatched old Etonian buffoon to show up soon in Scunthorpe claiming all credit, then mysteriously vanishing when "regrettable but unavoidable efficiencies" are announced by the new paymasters.

Agreed, and that is itself is demonstrative of the extent to which McDonnell and labour have been able to shift the concept of state involvement and interest in these type of industries.

Also agree, they there appears to be an attempt to prepare the ground for a cherry picking or cannibalising parts of the current structure. I’m hoping, but not confidently, that Community and the other unions are negotiating a no CR policy and an apprenticeship scheme.

 

[steeplejack]

More detail on the Turkish bid today

Bit of an all things to all people bid really; expanding the works, building a new furnace, raising annual production significantly, shipping lots of metal to Turkey, but also promising "efficiencies".

Banking on a deregulated post-Brexit employment infrastructure or redundancies? No detail as yet.

It's great that there looks to be a serious bidder and the town avoids catastrophe for now, but I am leery of these unspecified "efficiencies": hopefully British Steel won't re-emerge as a re-formed "North Lincolnshire Iron Company" with attendant working conditions.

 

[Smokeandsteam]

Yes, me too.

Leaving aside the bizarre government decision that a Turkish military pension fund is best placed to run a steelworks in Scunthorpe the detail on all of this is concerning scant.

The unions hopefully are engaged in the detail of the claimed expansion and investment in cleaner production methods. But given these pledges the talk of ‘efficiencies’ is, as you say strange

 

[steeplejack]

Whilst the Turks plod through "due diligence" and "exclusivity" a Chinese steel giant have now declared an interest and are talking as they can with the UK government.

Interesting news after a quiet few weeks. Not quite sure why the Chinese would want Scunthorpe given their own over-capacity in steel making.

Still, beyond the local papers, everyone has forgotten about British Steel which will suddenly become critically important for infrastructure in the event of No-Deal (poss even the unlikely return of T May's deal).

 

[steeplejack]

Some concern about the Turkish bid now although officially it's all "on track" to go through in mid-November. Given the nature of the buyer (effectively Turkish military pension fund) anyone would feel uneasy given current events in Rojava.

As well as the Chinese Liberty Steel have now rekindled interest. So even if the Turkish bid falls away steel making should stay in town- employing how many, and on what terms, remains the question. Can't help feeling that Liberty and the Chinese have set stalking horses running to make a cut-price bid acceptable to a desperate Official Receiver, in the event that the Turks fold.

The mid-November completion date may be complicated of course by the lack of a Business Secretary, in the event that the current Brexit deal shenanigans collapse the government and force an election. The Tories have just adopted a hard-right local councillor as candidate whilst Labour persist with Nic Dakin. If the Brexit Party select the right local candidate then they will have ambitions of being more than kingmakers in the seat, should they decide to run. Hard to see why they wouldn't.