Tata Steel to close Newport plant with loss of up to 380 jobs

Government urged to intervene to prevent ‘devastating’ redundancies

Tata Steel is to close a factory in Newport, with the loss of up to 380 jobs (PA)

Up to 380 jobs are set to go at a steel-making plant in south Wales after its owner announced the closure of the site.

Indian steel giant Tata said it had been “unable to find a way forward” for the Orb Electrical Steels factory in Newport. The plant, which makes steels used in electrical transmission, had been up for sale since May 2018.

Henrik Adam, chief executive of Tata’s European operations, said: “This is necessary, enabling us to focus our resources, including investment, on our core business and markets, helping us build a long-term sustainable future in Europe.

“Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges. We saw no prospects of returning the Orb business to profitability in the coming years.

“I recognise how difficult this news will be for all those affected and we will work very hard to support them.”

Orb is part of Tata’s Cogent electrical steels division, which had also put plants in Sweden and Canada up for sale. The Canadian site, which employees nearly 300 people, is to be bought by Japanese firm JFE Shoji. The smaller Swedish plant, which has 100 staff and manufactures advanced steel for electrical vehicles, is to be retained by Tata.

But the company said its Newport factory had been “loss-making for several years” as it struggled to compete in a fast-moving market “in which customer requirements have outstripped the site’s capability”. Converting the factory to produce steel for electrical vehicles would cost more than £50m, Tata added.

An engineering steels service centre in Wolverhampton is also set to close after Tata was unable to find a buyer. Up to 26 jobs are at risk, including at a sales office in Bolton.

Steelworkers trade union Community called the closures “devastating” and urged the government to intervene. Union leaders believe Tata had committed to safeguarding jobs as part of a 2017 rescue deal under which workers accepted reduced pension benefits.

Roy Rickhuss, Community general secretary, said: “This is shocking news, which makes a mockery of the understanding we reached with Tata around the jobs guarantee. There has been no consultation about this proposal either at UK or European level and company management should hang their heads in shame in the way this has come about.

“This is of course extremely devastating news for the workers affected, but all Tata Steel workers should be concerned by the way Tata is breaking its commitments.”

He added: “Ministers were closely involved in securing commitments from Tata over the future of the business. At a time when the government wants to decarbonise the economy and support a switch to electric vehicles, losing the UK’s only producer of electrical steels would be a grave error.”

Jessica Morden, MP for Newport East, said the closure of the plant was “tragic”. She added: “This is devastating news for the highly skilled workforce and their families. The Orb steelworks has been at the heart of Newport community since 1898.

“What is particularly tragic is that this the only UK plant with the potential to produce electric steels for motors and with investment, vision and government backing this could be the key part of the supply chain for electric vehicles.”

The government said the closure was “a commercial decision for Tata” but it would remain “in regular contact with the company, unions and other partners throughout this process”.

Last week a subsidiary of British Steel, which collapsed in May, was bought by French-owned Systra Group in deal which protected 400 jobs in York.