Construction slump and carbon costs blamed for 1,500 steel job losses

Government talk of economic recovery was undermined on Friday when the country’s largest steel maker announced plans to cut 1,500 jobs in Lincolnshire and Teesside.

Tata Steel, which bought the Corus business in 2007, blamed a continued slump in demand from the construction sector but also new climate change legislation for its decision.

“We are aware that our employees and their families will experience a very unsettling few months as a result of this announcement. We will do everything we can to provide them with support and assistance,” said Karl-Ulrich Köhler, chief executive of Tata Steel’s European operations.

“The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action. Another is the regulatory outlook. EU carbon legislation threatens to impose huge additional costs on the steel industry. Besides, there remains a great deal of uncertainty about the level of further unilateral carbon cost rises that the UK government is planning,” he added.

The Indian firm said it was proposing to close or mothball part of its Scunthorpe plant, putting at risk 1,200 jobs, as well as cutting 300 jobs at its sites on Teesside. But it also said it would invest £400m in its “Long Products” business over the next five years and hoped to bring a turnaround to the hard-pressed side of the business that it had achieved inside the speciality steel division.

source
http://www.guardian.co.uk/business/2011/may/20/tata-steel-job-losses-yorkshire-teesside