British steel industry, your thoughts

[Mike Muz]

Tough one this, not sure where I stand on it :?

On the one hand, who wants to pay more than they have to for steel products, to support British steel companies?
On the other hand, if we get everything from abroad, aren't we open to being stitched up by other countries if we no longer have infrastructure to produce our own.
I feel for the steel workers protesting today, as I do for the servicemen on a rally in support of a fellow serviceman in clink. But that's another subject.

They say they would like a level playing field when competing with foreign steel companies. I'd really like to know what the deal is with this, exactly.
People today on talk radio, were saying the workers should re-locate to where the work is, even if it means going abroad. How compassionate. Also saying that why should the Government bail them out with our taxes (Anyone remember the bank bail out? Any bankers not still on the gravy train? Pretty unlikely). So, let all the steel workers get laid off, and then we pay them benefits with our taxes? Short-sighted possibly I think.
The MoD are getting vehicles made in Sweden as they're cheaper. The Government are getting cheap steel from China, and get didn't Gideon only last week spout something about a higher earning, less welfare - based future for the country?
I'd like to know your thoughts on this situation,

Mike

 

[argonsixar]

Re:

Imagine if our Government paid the wages of the steel workers here. Made them produce as much steel as they could as quickly as was possible, irrespective of whether there were any buyers. Imagine that they also dictated the price of the sale of steel to foreign customers, such that it undercut the price of all other international producers. In good times, we were able to sell everything we made because the buyers queued up to get it.

Then imagine the demand dropping off massively and the buyers are no longer queuing up, but our Government keeps paying the steel workers to churn out masses of steel. Then our Government makes sure that our steel is sold to anyone who wants it at any old price, just to get rid of it.

That is what the Chinese are doing right now.

 

[longun]

The steel is manufactured here, the raw materials are Imported. Tata/corus etc new the plants wouldn't last long in the modern international climate. The Indians were all over scunny works figuring out how we made it to use our processes abroad.....but with much cheaper labour wages.

It's a massive shame but greed has once again fucked up a national export, sod the consequences for everyone else. Sad days are coming, again

 

[Osella]

What I can't understand is why the 'interim' solution was not possible when all this came up a year or more ago and the plant(s) - particularly Tata's was under review; and the Gov't didn't take the medium-term solution of subsidies to UK companies who buy British Steel. Neither did the previous Labour regime when Tata stated that the entire industry was in jeopardy in 2008..

In this way; the producers have buyers, even if they had to downsize and alter capacity in relation to the demand (some job losses, but not closures of plants and suppliers), the companies buying can keep buying from UK suppliers instead of imports and perhaps more importantly the skillsets and experience of the workers is not lost - with the ability to increase production according to demand if the timing's right.
Not only that, but now there's a real risk that somebody might want to re-start production when the Chinese stop flooding the market, etc (or when Yuan inflation makes their lower prices untenable) and they'll find that they have to go to Ukraine for experienced workers, and find that the plant is 'too outdated' and possibly contravenes some EU emissions or safety regs implemented in the next 5-6 years and re-opening is not possible..
It's not just about what's lost now, it's about what the effects in 5-10 years are that makes it worthwhile for a subsidised UK-wide purchasing discount (in the form of tax rebates perhaps) for companies like TaylorWimpey, Toyota, Honda, CAT, Redrow, GKN, etc. (I would imagine RangeTata buys it's steel from its sister company, but you never know...)
Of course, if people were less pissy about wind farms & nuclear power, the high energy costs that have crippled the steel industry's margins would also (have been)/be eased.. nothing happens in isolation & it's not all the fault of furriners dumping cheap products.

 

[KDM]

The world is changing, everyone wants everything cheaper. Look how many moan about the low wages for staff of factories that provide for Primark and yet many of those same moaners will buy from Primark.

Britain and it's steel industry is simply just too expensive compared to the rest and no matter what excuses people come up with, it is largely going to become an industry we used to have, just like shipbuilding. Most of our youth do nor want heavy duty hard working physical jobs anymore and as such our labour market is moving away from heavy industry, look at the coal mines.

It is what it is, most overseas owners of British steel companies do not keep them open for their steel but more as a universal tax write off for multi national companies. Once they cease to be that benefit or the company needs to reduce losses that are not favourable, they will close the British sites never to be opened again whilst looking after their own.

 

[Bats]

Except labour cost is almost always a very small fraction of the sale price of the product, even when it's produced right here in the first world. The bosses' slice is always much bigger.

So it's a bit daft to moan at the consumer for buying what they need to buy at the price they can afford to pay. The actual responsibility for worker's low wages rests solely on their bosses and their desire for a third house and fourth car.

God knows I'd like to buy clothes (or steel) made right here in England. But when the only stuff left is sold at savile row prices the choice isn't mine to make.

 

[JohnH]

Re:

In 2008, Ed Milliband's "Climate Change Act" became law. This compelled energy companies to increase their bills with a tax that everyone had to pay to subsidise "green technologies".

At the time, there were warnings that this would punish industries that heavily depended upon electricity, but nobody in politics or the media was listening because they'd told themselves that "green industries" would replace dirty old steel mills.

In 2011, the Alcan aluminium smelting plant in Lynemouth, Northumberland closed with the loss of 500 jobs. Alcan's chief executive explained the closure: "It is clear the smelter is no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation."

Now in 2015, steel works are closing all over the country. One of the union reps explained it on the TV: "Electricity's half the price in France or Germany".

The twist in the tale is that a friend of mine (who owns a solar panel distribution company) imports everything from Germany and China. So that's where all of the green subsidy money has gone -- and British industry's paid the price.

 

[mattr]

TBH, the British steel industry has been knackered for the last 20 years, at least, in my first job the only structural stuff we could get domestically was basic sections in a limited number of sizes, anything non-standard was imported from Germany. (We needed a fair bit of non-standard stuff as most of the plant was ~40 years old and we were simply tacking bits on and trying to match/fit what was already there) even offering to pay for tooling and set up costs was met with a blank stare.

The worst bits were trying to get anything exotic for the plant machinery, pressure vessels and pipework. Even materials which was invented and developed in the UK had to be ordered from overseas (Germany, Japan and China were the usual suspects) as there was no one in the UK who could be bothered (Not even at the prices we had to pay to get it imported.)

The company got sold to a german company in the end. They now manufacture all the plant equipment and structural stuff in Germany and ship it over. So the design office has gone, the two suppliers that used to be pretty much flat out manufacturing and assembling the stuff have both gone to the wall as well.

Bugger.

 

[hamster]

The Chinese doubled steel capacity in the past 10 years; now their economy and building boom has slowed half the mills are already idle. Iron ore prices have collapsed. It's a pretty clear indication that this is an industry which won't recover for a long time. Subsidies etc will only prolong the agony. Note that the Government and EU have already put in anti-dumping claims against Chinese steel.
In shipbuilding the Chinese are putting the Koreans out of business, forcing them to make more specialised ships, not just the floating boxes of bulkers and tankers. Shipbuilding is also about to collapse as the Baltic Index is so low as to make most bulk lines loss-making - so no new orders. Container shipping is suffering (now as low as £250 for a twenty footer from Yantian to Rotterdam) but they are surviving by consolidating and moving to the huge boxships like Triple-E class.

 

[JohnH]

Re: Re:

What we need is a proper war.

You'll get one if ISIS reaches the Israeli border.