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Saving the UK Steel Industry
is very crucial for British people and government must ensure that it remains it's priority.
In the UK,the total steel production has dropped by over 38% to just 656 thousand tonnes (lower than Poland for first time in the history)
tata for now
is very crucial for British people and government must ensure that it remains it's priority.
In the UK,the total steel production has dropped by over 38% to just 656 thousand tonnes (lower than Poland for first time in the history)
There's reason for that, we don't build ships up north anymore, steel is cheaper to make where it's most needed due to export/import costs. Sad fact is this will go the same way as the coal mines and for the same reason, time moves on as does demand.
We propped up the bankers and continue to throw money at farmers and public sector pensions. We can't afford it.
.
From an accounting point of view it would be good to see the actual figures for this plant.
It seems to be talk of "book values" are meaningless as are the losses of £1mil a day being bandied about (by Tata) in the absence of any knowledge of what is included in that figure.
My accountant logic says it would be hard for a capital intensive industry such as this to lose money once sunk costs and finance costs are stripped out.
This one smells like dodgy coal mine maths.
What happened to Northern Power House.
Surely if the North was to start producing "stuff" again steel is the raw material that is key to it all. The High speed rail links that are to be built would surely need lots of this raw product.
I think we need to be wary of the Chinese and not just jump into bed with them at every opportunity. They are a very disruptive nation and IMO not be trusted. They are overproducing cheap steel backed by their own government. Why would the Chinese government fund cheap steel for the rest of the world? The answer is simple it's to eradicate steel production anywhere else. As once these plants go they are gone for good, leaving China as the only country with the ability to produce any steel. then will it steel be cheap? I doubt it. They will be able to hold the world to ransom.
if the UK government does not step in and protect this industry the Northern Powerhouse will fall at the first hurdle, proving it was nothing more than spin in the first place. We need to make things if we are to have a strong economy like the Germans.
I would impose extra duties on Chinese steel coming into UK to level up the playing field.
imports
Check out Donald Trump policies.
e is the first politician who has ed the phrase "we cannot afford it" in various contexts.
He is no buffoon unlike the British media are trying to make him. media
Large groups and multinationals; EU factors
When financial difficulties arise for an individual company (or segment/division) of a multinational or large group several questions should always arise:
Has any asset stripping (via intra Group charges / fees / dividends) occurred - both in recent ownership and in immediate prior ownershipWhy other parts of the group are not so badly affected
Currently we have the BHS retailer and Tata Steel UK where one or more of the above questions might well be relevant.
Beyond the above questions, as the UK "is part of the EU" it also worth looking into how other EU countries' steel industries are weathering the current storm of dumped cheap steel (unrealistically cheap as seemingly China is exempt from the costs of pollution control issues). Just maybe UK steel plants are less efficient than those on mainland Europe? Or do the Europe mainland steel plants benefit from EU subsidies / support that UK doesn't?
EU commission at fault
The EU commission has already done the calculations and come up with a ~16% tariff which they consider adequate to correct the 'dumping' element of Chinese steel.
So there is no longer any dumping of Chinese steel as far as the commission is concerned.
It's the EU commissions "dodgy maths" that should be under scrutiny, but they seem to have cleverly diverted attention to the 'lesser duty' rule. They want this scrapped so there is more central power in the EU trade directorate. .
They don't need more power. They need to do the maths without the help of calculators borrowed from German car manufacturers.
Am I being thick?
I used to live in North Lincs and the steel plant covers 100s of acres of Scunthorpe. If that isn't an asset (even if pretty low real estate value once the steel jobs go) what is?
Pension black hole
UK private pension schemes are a major liability that nobody can afford to take on, not even Vince cable's department, oh, he isn't a Minister now is he. I worked in heavy industry in the 70's and 80s, the workers were greedy and lazy, they though the country owed them a good living and walked out at the drop of a hat if they didn't get A 25% pay rise when inflation was high.
It doesn't matter if
the figures add up or not. The stark reality and the question is Do we keep our steel industry? If no then what do we do with the work force and how much, in the short term, would it cost. Then is there a long tem future for them.
If yes, then we need to sit down with work force (I include unions and managers) to see if it is viable.
The simple question is, should we be prepared to accept a loss when the alternative could be the destruction o families etc?
If we can bail the banks out then there is no reason why we can't do the same for our steel Industry, but not at unlimited cost.
As far as the EU is concerned it is Britain that is forcing down steel prices (perhaps a hidden agenda?)
Very good points have been raised by you which needs answering but can be business be sustainable even if more capital is thrown at it.Why should steel buyers be willing to pay more when they can buy the more competitive Chinese steel. Can the bail out money yield higher returns when invested elsewhere?
Alternatives in future
I have no idea what to do about the steel industry in the UK, but find many of the postings above well-thought out and credible.
Where areas of the country rely on one main industry - as in the coal mines, more lateral thinking is required.
Where I am in the South-east, there are far too any of us here, as that's where the jobs are. We risk pandemonium as more holes are bored for yet more tunnels to carry more trains that will soon be full to overflowing. Essential workers like teachers and nurses are going to gravitate where they can afford to live. Recruitment for these jobs in London is already difficult.
So let's kill 2 birds with one stone, and start some new towns oop north or in Wales and attract eg so many IT companies there that they don't need to be based in London and so on. Housing would be cheaper, and the govt could pay for more infrastructure. Companies based in London could gradually be taxed more for not moving out and young people could have somewhere to live and have babies.
Let me know when it's up and running and I'll seriously consider moving there to do their tax returns and accounts.
Lateral thinking indeed ...
I have no idea what to do about the steel industry in the UK, but find many of the postings above well-thought out and credible.
Where areas of the country rely on one main industry - as in the coal mines, more lateral thinking is required.
Where I am in the South-east, there are far too any of us here, as that's where the jobs are. We risk pandemonium as more holes are bored for yet more tunnels to carry more trains that will soon be full to overflowing. Essential workers like teachers and nurses are going to gravitate where they can afford to live. Recruitment for these jobs in London is already difficult.
So let's kill 2 birds with one stone, and start some new towns oop north or in Wales and attract eg so many IT companies there that they don't need to be based in London and so on. Housing would be cheaper, and the govt could pay for more infrastructure. Companies based in London could gradually be taxed more for not moving out and young people could have somewhere to live and have babies.
Let me know when it's up and running and I'll seriously consider moving there to do their tax returns and accounts.
Interesting proposition. And I don't think it would even take the commissioning of new towns. There's many towns that have gone downhill due to losing their main industry and economy e.g. due to coal mines closure, that have empty factories and houses aplenty. An injection of cash aimed in he right areas for regeneration - transport links, schools, medical facilities, internet capability for example - and incentives as you say for businesses to move out of the south-east, could be a better way to spend the limited money than bailing out industry after industry.
I live about 20 miles north of Edinburgh, and know of a very large number of empty buildings and industrial estates in the new towns and elsewhere. Most of the people in the county where I live now only view it as Edinburgh's commuter belt due to rapidly increasing Edinburgh house prices, with similar issues to those described in the south-east albeit on a smaller scale. And I'm sure there's similar areas elsewhere in Scotland as well as the north of England, Wales, etc.
Lovely Idea...But:
So let's kill 2 birds with one stone, and start some new towns oop north or in Wales and attract eg so many IT companies there that they don't need to be based in London and so on.
How?
Britain lacks a viable and vibrant Silicon base: Arm Holdings cannot "Lay Down" (Manufacture) silicon products as there is no industry.
Additionally, in Britain we have no computer manufacturers: the last was ICT. Flogged off to the Japanese (Fujitsu).
France has Bull: Germany has Siemens-Nixdorf.(Now: Wincor Nixdorf).
Software and peripheral development follows in the draft of computer manufacturing.
How about some long term strategic thinking for a change?
Something that our politicians seem to be congenitally incapable of. So to a degree I support the thinking of johnjenkins, above.
Oooh goody - let's rely on imports for everything! Nice thinking but the trouble with that is that unless you're adding value and then exporting the resulting product (for a profit) the way that German car manufacturers are, you can't live for very long with the trade imbalance that's created.
So do we have a choice with British Steel? How far down the slippery slope of losing all of our heavy value-adding industries can we go before the economy becomes totally unviable? I'd say, not very much further. All the fervent, perhaps childish, hopes that 'services' would fill the gap have so far come to nothing and look like continuing that way for the foreseeable future. And if LSE falls into German hands...
I'm sorry, I don't have all the answers, hardly any actually, but what scares me is that just closing the lot down would be the easiest thing to do but could potentially be dire in the longer term. But whatever decision is taken, it needs to be so in the context of a proper strategic framework and not just on the basis of short-term expediency.
So I'd say - it must be saved, at least for now. Then we need to get a team of the best economic and financial brains together to define where this country really needs to be heading.
As an ex-strategic planner, we know where we are but do we know where we want to be and how we should get there? Do we heck!
Strategic thinking
Politicians don't think beyond the next election, if they did we would have a plan for the country as a whole, the housing, the jobs, the taxes, the manufacturing base et al. They move quickly when it comes to war but sit on their thumbs when what really matters to the people is in crisis.
The Problem!
Politicians don't think beyond the next election, if they did we would have a plan for the country as a whole, the housing, the jobs, the taxes, the manufacturing base et al. They move quickly when it comes to war but sit on their thumbs when what really matters to the people is in crisis.
Is, Evan, the nightmare of the Quinquennial Act: every five years there must be a General Election.
http://archive.spectator.co.uk/article/16th-november-1833/12/quinquennia...
Now, since it takes a minimum of five years to create significant change strategies; and start, perhaps to see the effects and benefits, invariably any paradigm shift in strategy causes short term pain for long term gain: hopefully, if the strategic plans are correct.
By which time the electorate have already experienced the pain, yet not seen and benefitted from the gains. Plus a majority are far too dumb to comprehend the bigger picture.
Ergo, then they fall prey to the Siren Calls of opposition Snake Oil Salesmen selling dishonest bills of goods.
Sound familiar?
Contradiction
David Cameron said on the news last night that "we are looking at all the options and have ruled nothing out but I don't think nationalisation is an option".
Is that not ruling something out?
The Indians will close it, which is an easy decision when you are sitting in Mumbai.
The Government, Unions, Local governments and Employer' should sit down, put their political differences aside, and see if there is a long term solution to this mess.
If they had done this years ago there would still be Shipyards on the Tyne.
It doesn't fill me with any hope and I feel so sorry for the steel families and communities who look likely to lose their livelihood just like the shipbuilders and miners before them.
Reality Time!
China has been dumping steel at beneath cost only to preserve its forex inflows, during the down cycle:
Such dumping is against WTO rules:
The USA has erected 266% import tariffs against Chinese steel because of dumping and in order to preserve the American steel industry.
http://www.wsj.com/articles/u-s-imposes-266-duty-on-some-chinese-steel-i...
The German steel industry prospers, since:
1. The German government provides significant energy cost reductions, on strategic terms:
2. German industry creates a big and growing internal market:
http://en.stahl-online.de/index.php/topics/economics/steel-industry-in-g...
If Britain was out of the benighted EU, then it could set whatever protective tariffs it damned well wanted to enact!
Final cynical Friday comment.............
There is little internal market for steel in the UK since the City doesn't consume steel: and neither is it needed for house price booms and bubbles.
Thanks again a bunch, Thatcher!
Thatcher? What has she got to do with it? She left office in 1990 and we have had 13 years of Blair / Brown in the interim; couldn't they have righted any wrongs or do some people just look for cheap shots.
Cheap labour
Seems it was a check mate several moves back. The competition has massive economies of scale and much cheaper labour. Were dead in the water. There could only be a national security argument for retaining.
Funny how Maggie
still gets the blame, years after she died.
I blame the Romans I do, after all what have they ever done for us?
Which Government?
still gets the blame, years after she died.
I blame the Romans I do, after all what have they ever done for us?
Privatised BSC in 1988?
Badly...
Amongst many others.
The other problem,
of course, is that we are not all academics. To get rid of our manufacturing industry altogether is an option but it has to be replaced with heavy training within the service industry. This will probably leave a lot of practical workers much poorer and worse off making the class divide even wider.
We have to find a balance and that is what we pay our ministers and their entourage for.
Oi, DC you and GO (without Cleggies guidance) you both are turning into a right pair of tossers.
I worked for them for many years
And believe me they make the books say what they want, so don't take a lot of notice. They own vast amounts of land and building.
MONEY AND STEEL.
IN THE WORDS OF DAVID NELLIST, IF THE BANKS HAVE IMPORTANT ENOUGH FOR THE GOVERNMENT TO BAIL OUT - WHY NOT THE BRITISH STEEL INDUSTRY.,
Erm
IN THE WORDS OF DAVID NELLIST, IF THE BANKS HAVE IMPORTANT ENOUGH FOR THE GOVERNMENT TO BAIL OUT - WHY NOT THE BRITISH STEEL INDUSTRY.,
Because the bank collapse would have destroyed the country and this will only destroy port Talbot?
"IN THE WORDS OF DAVID
"IN THE WORDS OF DAVID NELLIST, IF THE BANKS HAVE IMPORTANT ENOUGH FOR THE GOVERNMENT TO BAIL OUT - WHY NOT THE BRITISH STEEL INDUSTRY.,"
Because once the bad debts are written out banks intrinsically make money. Steel plants don't because nobody wants their output.
I live in (south) Yorkshire
and saw the destruction of moral and the rise of social decay due, in part at least, to the closure of the coal mining industry.
Years later - following on from the 1992 demise, we have dual carriageways and a plethora of call centres and vast distribution and storage facilities, across the whole of the Dearne valley. In other words, probably most of the working population has been redeployed but, the social change, which has taken place and, was inflicted by a series of occasions at the time, has been, in my view, catastrophic. Barnsley and its surrounds are a shadow of what they were, prior to the early 90's - a tragedy and not a cat in hells chance of turning the clock back.
Whilst heavy industry may not be to everyone's taste it did and does provide a sense of community which successful politicians and (certain union grandees) seem to easily ignore.
Having lived in this community all of my life I'd always rather live next door to a miner, or steelworker, than any banker. The former sector know the value of everything and, in crisis, will support everyone. Bankers seem to know and have learnt very little but still we seem to bow and scrape to this sector. Really!
Indeed!
and saw the destruction of moral and the rise of social decay due, in part at least, to the closure of the coal mining industry.
Years later - following on from the 1992 demise, we have dual carriageways and a plethora of call centres and vast distribution and storage facilities, across the whole of the Dearne valley. In other words, probably most of the working population has been redeployed but, the social change, which has taken place and, was inflicted by a series of occasions at the time, has been, in my view, catastrophic. Barnsley and its surrounds are a shadow of what they were, prior to the early 90's - a tragedy and not a cat in hells chance of turning the clock back.
Whilst heavy industry may not be to everyone's taste it did and does provide a sense of community which successful politicians and (certain union grandees) seem to easily ignore.
Having lived in this community all of my life I'd always rather live next door to a miner, or steelworker, than any banker. The former sector know the value of everything and, in crisis, will support everyone. Bankers seem to know and have learnt very little but still we seem to bow and scrape to this sector. Really!
Indeed!
True real new wealth is always created by adding raw materials to innovation and sweat. Which obviously then creates real employment in its vacuum.
Which is precisely why nation states such as Taiwan, love 'em or hate 'em, sit on massive Sovereign Wealth Funds, whereas the UK's Current Account has been in deficit for years and is growing.
Where Britain (And Thatcher and her advisers) went horribly wrong was to believe true wealth creation could be replaced by service industries ( Service and Industry in the same sentence is of course an oxymoron), finance, the City and bankers let free from any sensible constraint, who then created Mickey Mouse Credit Money from debt.
Fact: circa 60+% of Britain's total wealth is now represented by residential housing.
Source: ONS Annual Study on Britain's total wealth; 2003>
The book value
book value of “almost zero”.
The book value is almost zero, may be due to depreciation policy, and old assets, which may still be in use, and have a value in use.
As for George Osbourne, he partly blocked EU tariffs on imported steel, why because he did not want to upset the Chinese, after all they are building our future Nuclear Power stations, the price being our Steel lndustry
Chinese steel
""As once these plants go they are gone for good, leaving China as the only country with the ability to produce any steel. then will it steel be cheap? I doubt it. They will be able to hold the world to ransom."
That's exactly how I see it. Remember what the Bible tells us "beware the yellow peril". However, what is very interesting is that Gordon Brown was keen to bail out the banks, whereas the money needed to save MG Rover was peanuts by comparison. The Chinese bought MG Rover and MG's, God forbid, are now made in China. However, it seems they don't sell very well here, certainly not in the same numbers that the Abingdon products did. Chinese steel? go to any of these discount stores and buy a set of screwdrivers made of Chinese steel and see if you can use them without them breaking. I just can't believe that any of the steel that they produce is of good quality, so I don't understand why we buy it in the first place, irrespective of the price.
Crowd
If the government held a referendum on whether the populace wanted to own steel manufacturing facilities. If the answer was yes, it's adjustment to tax codes to pay for it. £50 each should sort it. Then create a board to guide it; as they did for state ownership of banks.