Workers' Weekly On-Line
Volume 54 Number 25, October 12, 2024 ARCHIVE HOME JBCENTRE SUBSCRIBE

Tata ends virgin steel production at Port Talbot

Further Destruction of Manufacturing over Which Workers' Decisive Say Is Being Denied


Tata Steel, Port Talbot

Tata Steel has ceased virgin steel production at its Port Talbot plant, marking what is being called the end of an era for traditional steelmaking in South Wales. The final blast furnace was shut down on September 30, 2024, a decision that will impact thousands of workers and devastate the local community - a decision in which those workers and their community have played no part.

Tata Steel, which owns the plant, is to replace its traditional blast furnaces with a £1.25 billion electric arc furnace facility. The Abbey Works, where steel has been made for over 70 years, has now ceased producing virgin steel, as the company shifts its focus to recycling scrap metal, in a move that will require far fewer workers. Now that Blast Furnace 4, the last operational blast furnace, has been shut down, some 2,800 jobs have been eliminated [1]. The plant had employed half of Tata Steel's British workforce, which stood at 8,000. With nearly 4,000 direct jobs at risk and additional indirect roles in jeopardy, concerns of widespread economic devastation are mounting in Port Talbot.

What is being pushed by Tata and the media is that this devastation is an advance because the old method of production involved fossil fuels, while the proposed production does not and is therefore "greener". In 2023, the then government offered Tata a £500 million pay-the-rich scheme greenwashed as a subsidy package to aid in the transition to low-carbon steel production. The conclusion can be drawn that Tata's move to shut down operations and shift to electric arc furnaces is in part a strategic attempt to pressure the British government into providing yet more financial support to improve its rate of return.

Tata justifies the closure by pointing out that Port Talbot is losing £1 million daily. But workers create enormous new value in producing this critical basic material. This new value is primarily appropriated by the owners of capital, including Tata's debt and equity owners. Tata bought the plants at a low price and accumulated vast sums from the value created by its labour force. [2]

It is clear, however, that Tata is treating Port Talbot as a pawn in its global strategy, while pushing significant expansion in both India and the Netherlands. In India, the company has set the goal of doubling its steel production capacity to 40 million tonnes per year by 2030. A key part of this strategy is the development of its Kalinganagar facility in Odisha, where Tata Steel has commissioned the largest blast furnace in the country. This comes as part of a 270bn rupee (£2.4bn) expansion project that will boost the plant's capacity from 3 million tonnes per annum to 8 million tonnes. The enhanced production will enable Tata Steel to meet increasing demand across industries such as automotive, infrastructure, power, shipbuilding, as well as military production. The company is also investing heavily in its IJmuiden plant in the Netherlands. [3] It is noteworthy that, while the new electric arc furnace at Port Talbot is scheduled to be operational by 2027, in the interim, Tata will import semi-finished steel slabs from India and the Netherlands to meet demand. The huge payout from the British government is revealed in this context as a pay the rich scheme aiding nothing but the monopoly's global expansion plans.

For the community of Port Talbot, steel is not just an industry - it is the economic lifeblood of the town. Generations of families have depended on the plant for jobs, and the town's identity is intertwined with steel production. Since Port Talbot's first blast furnace went into operation in 1902, the plant has weathered multiple crises, including the nationalisation and later privatisation of British Steel, which became Corus in 1999 before being acquired by Tata in 2007. Throughout this period, Port Talbot's workers have demonstrated remarkable resilience, battling against layoffs and closures.

"Today marks an incredibly sad and poignant day for the British steel industry and for the communities in and around Port Talbot which are so intricately connected to blast furnace steelmaking," said Community Union General Secretary Roy Rickhuss [4], declaring: "The closure of Blast Furnace 4 marks the end of an era, but this is not the end for Port Talbot. We will never stop fighting for the future for the steel industry and our communities in South Wales."

Labour's Chancellor, Rachel Reeves, has spoken about the importance of addressing the foundations of the economy, including steel production. These words ring hollow in the face of this unilateral closure.

Likewise: "Good jobs and homes are the foundations of good lives and communities," said Deputy Prime Minister Angela Rayner when in opposition, "and it's a Labour government that will provide those foundations and build on them, whilst also empowering communities and local leaders to create strong, sustainable economies." [5] However, these events prove the vacuousness of this statement. Powerful private corporate interests, like those of Tata Steel, continue to trample public right into the ground. The closure of Port Talbot, driven by Tata's pursuit of profits, exposes how such interests take priority over the well-being of workers and the stability of local economies. Tata is simply abandoning the community after extracting maximum value, leaving workers and families to deal with the economic devastation that follows.

Such powerful competing private interests cannot offer solutions and instead destroy productive forces and skills. Only the working class holds the key to solving the problems. As Rickhuss pointed out, "it simply didn't have to be this way. Last year Community and GMB published a credible alternative plan for Port Talbot which would have avoided the need for compulsory redundancies and ensured a fair transition to green steelmaking for the workforce." That this plan was rejected outright by Tata, with all the consequences that are to follow, shows just how urgent it is that workers organise to end their marginalisation and to have the decisive say over the matters that affect their lives.

Notes
1. "Traditional steelmaking in Port Talbot ends", Huw Thomas and Paul Pigott, BBC News, September 29, 2024
https://www.bbc.com/news/articles/c70zxjldqnxo
2. "The Tata oligopoly plans to destroy productive forces, while Port Talbot Steel workers demonstrate that enough is enough", Workers' Weekly, , February 10, 2024
https://rcpbml.org.uk/wwie-24/ww24-02/ww24-02-06.htm
3. "Why Tata Steel Shares Are Upbeat Today", Benzinga India, September 23, 2024
https://in.benzinga.com/markets/equities/24/09/40973311/why-tata-steel-shares-are-upbeat-today
4. "The end of an era: Blast furnace 4 closes at Port Talbot", Roy Rickhuss, September 30, 2024
https://community-tu.org/the-end-of-an-era-blast-furnace-4-closes-at-port-talbot/#497ccf1e
5. "Angela Rayner to set out Labour's vision of 'real life levelling up'", Alan Jones, Yahoo News, September 11, 2023
https://uk.news.yahoo.com/angela-rayner-set-labour-vision-213000455.html


Link to Full Issue of Workers' Weekly

RCPB(ML) Home Page

Workers' Weekly Online Archive