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Tata Steel and Sembcorp could axe jobs
SCORES of North-East workers face an anxious wait after two major Teesside firms revealed they could axe jobs.
Tata Steel yesterday confirmed 40 management and administration posts are at risk across plants in Redcar and Skinningrove, east Cleveland, as part of plans to cut 500 UK jobs.
Just hours later, power station operator Sembcorp, based at Wilton, near Redcar, told The Northern Echo it was consulting with staff after revealing proposals to close a coal-fired boiler in Wilton Power Station by May next year and sell its asset protection and security business.
Sembcorp, which employs about 385 Teesside workers, say no decision has been made on either proposal, but confirmed staff were aware they could result in job cuts.
Last night, North-East MPs spoke of their disappointment over Tata's announcement, which comes just months after the steelmaker insisted it had no plans to cut North-East jobs despite announcing record £1.2bn losses for the year, in July.
The firm, which employs about 1,500 North-East workers, says it needs to restructure its Long Products division after being hit by a drop in demand for steel, particularly in the UK construction market, which stands at about half of 2007 levels.
Its Hartlepool pipemill and research and development centre, near Wilton, are not affected.
The plans include proposals to axe 340 jobs in Scunthorpe and 90 in Workington, with 40 posts affected across Redcar, where it runs the Teesside Beam Mill, which rolls and finishes structural sections for use in construction, and Skinningrove, which provides steel for track shoes on earth moving vehicles.
Tom Blenkinsop, MP for Middlesbrough south and east Cleveland, previously led an all-party House of Commons meeting to launch a steel action plan to help companies cut costs and increase production and jobs.
He said: “This paints a very bleak picture for Teesside's economy and I didn't expect it to be as many as 40 jobs.
“These are well-paid jobs that the area could very much do with having.
“The Government is putting funding towards the South-East when the North-East is crying out for help to build our manufacturing economy.
“I don't see enough Government support coming through.”
Redcar MP Ian Swales added: “I'm disappointed to see any job losses in this area, and I really feel for those affected and their families.”
Karl Koehler, Tata Steel’s European operations chief executive, said the company had been forced into making changes after being damaged by the tough economy.
He said: “European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years.
“On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry.
“As difficult as the proposed changes are, they are intended to build a stronger future by enabling the Long Products business to compete in even the current challenging economic and regulatory conditions.
“We will do everything we can to support our employees through this unsettling time.”
Bosses at Sembcorp say they too have had to look at restructuring the business to protect its future after being affected by factors such as a fall in on-site customers and poor wholesale energy market conditions.
The company, formerly owned by Enron and ICI, runs Wilton Power Station and Sembcorp Biomass Power Station, as well as a major water treatment plant, two gas turbines and package boilers.
A spokesman said it was looking at proposals to sell its security division and close its coal-fired Boiler Six within Wilton Power Station, while moving its remaining businesses into three groups.
He said: “Sembcorp Utilities UK has begun a period of formal consultation with trade union and elected employee representatives concerning a number of proposals aimed at securing a brighter future for the business.
“The proposals include the potential sale of the asset protection and security business and the potential closure by next May of the coal-fired Boiler Six within Wilton Power Station.
“However, no decisions have been made concerning these proposals, which employees are aware include a potential reduction in the workforce, and none will be made until the company has fully consulted with the employees.”
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