Liberty Steel is to implement the next phase of its restructuring programme which could affect up to 440 jobs, the company has announced.
Liberty, part of the GFG Alliance, said it will offer an alternative to redundancy through a programme which aims to retain, redeploy and reskill affected workers.
Workers will be offered a level of guaranteed salary and outplacement opportunities, with the intention of being redeployed within Liberty Steel UK on previous employment terms when market conditions allow.
The company said the measures will forge a “viable way forward” for the business and help safeguard jobs in its wider workforce of 1,900 permanent employees, and up to 5,000 including contractors.
Jeffrey Kabel, chief transformation officer for Liberty Steel Group, said: “Refocusing our operations will set the right platform for Liberty Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities.
“The support of our marquee customers will enable us to produce high-value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy.
“We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a two million-tonne green steel hub.
“While our action is expected to regrettably impact the roles of some of our workforce, we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy.
“Liberty’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”
Liberty said in a statement: “Despite the injection of £200 million of shareholder capital over the last two years, the production of some commodity grade products at Rotherham and downstream mills has become unviable in the short term due to high energy costs and imports from countries without the same environmental standards.
“Primary production through Rotherham’s lower carbon electric arc furnaces (EAFs) will be temporarily reduced while uncompetitive operating conditions prevail.
“These actions together with the idling of Liberty Performance Steels in West Bromwich and the reconfiguration of Liberty Steel Newport into a storage, distribution and trading hub, may potentially impact up to 440 roles across the business.
“The company will consult with employee representatives, trade unions and UK Government throughout the process.”
Alun Davies, national officer of steelworkers union Community, said: “This announcement is a body blow to Liberty Steel’s loyal UK workforce, who couldn’t have done more to get the company through an exceptionally challenging period.
“Since the collapse of Greensill Capital, the trade unions have supported the company because we believed that delivering the company’s business plans – which were audited and backed by the unions’ independent experts – was the best route to safeguard jobs and the future of all the businesses.
“However, the plans we reviewed were based on substantial investment and ramping up production, including at Liberty Steel Newport, and did not include the ‘idling’ of any sites.
“These are challenging times for all steelmakers but the company’s decision to change their plans, on which we based our support, and announce a strategy seemingly based on capacity cuts and redundancies, is devastating.
“The consultation on these proposals must be meaningful and the unions will be scrutinising the detail of plans to idle Newport, West Bromwich and Tredegar, including Liberty’s commitment to restart the plants when conditions allow.
“Government must play their part, stop the dithering and act to deliver the competitive energy prices our industry so desperately needs. Steelworkers have had enough of warm words, it’s past time for government to decide whether it wants a steel industry in this country.”
Stephen Kinnock, Labour MP for Aberavon and chair of the All Party Parliamentary Group on Steel, said: “We all simply must wake up to the importance of the steel industry and its workers.
“The world will use more steel in the decades ahead than we do today, and in the age of Putin’s invasion and China’s aggression we desperately need steelmaking capacity here in Britain.
“We simply cannot afford to offshore good jobs, our national security and carbon emissions to dirtier steel plants abroad, often controlled by authoritarian regimes that wish Britain harm.
“We need a Green Steel Deal between government and industry – with action on Britain’s uncompetitive electricity prices – and we need it now. Today’s news is a stark illustration of the cost of the UK Government sitting on its hands and doing nothing.”
Unite national officer Harish Patel said: “Unite will be demanding forensic scrutiny of all aspects of Liberty’s plans following the announcement of these potentially massive redundancies.
“We will utilise every element of the union’s power to challenge these plans and their consequences for the long-term future of the Tredegar, Newport and West Bromwich sites.
“The Government has also a case to answer: Steel manufacturing is a sector of critical national importance, both for the nation’s self-sufficiency and the thousands of jobs it supports.
“Ministers must come up with a plan to solve the astronomical energy prices that are crippling the sector.
“The ball is in their court on this crisis – they cannot walk on by again.”