Tata Steel announces the axing of 400 jobs at its Port Talbot site, citing high business rates and uncompetitive energy costs as major factors behind the decision.
After revealing £60m in annual energy expenditures in Wales alone, Tata made moves for voluntary redundancies at Port Talbot with the consultation process beginning immediately.
Chief executive Karl Koehler, who said the changes were vital if the company was to remain competitive, felt the job losses would reduce costs and enable Tata to compete in an era of lower market demand.
“Steel demand and prices are likely to be under pressure for some years. Our business rates in the UK are much higher than other EU countries’ and our UK energy costs will remain uncompetitive until new mitigation measures come into effect,” he said.
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“These proposed changes then are vital if we are to build a competitive future for our strip products business in the UK.”
The steel company’s announcement is a fresh blow to the economy in the Welsh town, after it let go 600 people in 2012 from the site where it employs over 7,000 people.
Mr Koehler cited Tata’s investment of over 250m in the past two years in technology and a hot strip mill in both Port Talbort and Lanwern, Newport as an illustration of its commitment to Wales.
UK Business Secretary Vince Cable added: “This is understandably a difficult time for the workforce at Tata Steel in south Wales as the company tries to weather challenging market conditions.
“I have been in close contact with the chief executive at Tata Steel and understand they will offer voluntary redundancy packages and cross match people to other parts of the business to try and avoid compulsory job losses.”