Steel – Sale of Long Products Europe:

Steel Workers Should Demand a New Direction for the Economy

Tata Steel Special Profiles – Skinningrove
On October 15, Tata Steel, an Indian-based global steel monopoly which owns the majority of the steel industry in Britain and is the second biggest steel producer in Europe, announced that it had signed a “Memorandum of Understanding” with a reported “vulture capitalist” company, the Klesch Group, to purchase the Long Products Europe business from Tata Steel. Long Products Europe produces a wide range of steel products including sections, rails, wire rods, special profiles and plates for the Rail, Yellow Goods (heavy duty equipment), Energy and Construction sectors. With approximately 6,500 employees, it currently produces around 3 million tons and has the capacity to produce up to 5 million tons annually. Tata Steel’s Long Products Europe includes: Scunthorpe integrated steelworks, Teesside Beam Mill – Lackenby, Special Profiles – Skinningrove and Darlington, Dalzell Plate Mill – Scotland, Clydebridge – Scotland, Immingham Bulk Terminal (port terminal), Hayange Rail Mill – north east France, Engineering workshop – Workington, Rail consultancy – York and may include a further 20 distribution sites in England, Scotland, Ireland and Germany according to the announcement.

This latest development comes after Karl Koehler, the chief executive of Tata Steel, said that the steel industry has come “through the worst” in Europe and that the group’s Long Products division “is moving towards” break even. The Klesch Group says on its website that it “is a global industrial company that acquires commodity producing companies, applies optimisation techniques to efficiently run their operations and manages risk through commodity trading strategies”. Frank Roy, Scottish Labour MP for Motherwell and Wishaw, said in Parliament that Klesch had a history of “asset stripping and dumping companies across Europe”. Both Prime Minister David Cameron, when questioned in

Tata Steel’s Scunthorpe Steelworks

Parliament by Frank Roy, MP on October 22, and Business Secretary Vince Cable in a statement issued to the press, seem unconcerned with this latest threat to the steel industry and the jobs of steel workers and both brushed off the matter with only that they should “talk” to the Klesch Group. Vince Cable also went further and said that this was the “harsh reality” of trading conditions in parts of the steel industry. He said, “I met the global head of Tata in India this week and he has personally re-affirmed to me his company’s commitment to the British steel industry and to investing substantially in Port Talbot and strip steel.” He then said he and his officials will continue to work closely with Tata Steel and “seek to meet the potential buyer, Klesch, to understand more about their plans”. Then he welcomed the Klesch Group’s “stated intention to support the continuity of the business”.

The National Trade Union Steel Co-ordinating Committee, which includes Community, Unite, GMB and UCATT, immediately condemned Tata Steel for its failure to consult with worker representatives before any announcement and demanded more time for negotiations. They asked Tata Steel to assist an “independent consultant” Syndex, which they have brought in to look at alternative action and this was agreed in an announcement by Tata Steel. Union representatives also raised concerns about the implications for their pensions during a meeting at the Trades Union Congress in London. They warned that they would ballot their members for industrial action if Tata made any moves against the British Steel Pension Scheme, whose fund value fell to £12.7bn over its last financial year.

Some commentators have pointed out that the “harsh realities” that the government is talking about to justify the sell-off of this steel products industry to “vulture capitalists” boil down to the “strength” of sterling against the Euro and the “high cost” of

Steel workers fighting closure of Redcar blast furnace, 2009

energy. These commentators said that the government could intervene if not on the strength of sterling certainly on the cost of energy. On the back of their claims what the commentators are suggesting is that the government subsidise both Tata Steel and the energy monopolies for the cost of energy. In other words, the solution is to pay the steel monopoly, without any claim against the huge profits of the privatised energy and other monopolies. Of course, the government should intervene to protect the steel industry against these monopolies, not to pay them but to end their wrecking of the economy, make the claims against them on behalf of society, so as to plan and benefit the economy that it meets the needs of a modern economy in steel production.

Also, the role of these comments is to embroil the workers further in capital centred solutions that the only alternative to “vulture capitalists” is to pay the very global monopolies that have and are already carving up and wrecking the steel industry in Britain and in other countries. The solution lies not in workers looking for alternative capital-centred solutions but in demanding a new direction for the economy. This means the workers taking up their own political programme in the Workers’ Opposition and fighting to place their political alternative at the centre of politics in Britain.

What is this alternative? Any analysis of the steel industry shows that it is a vital part of the economy, and needs to be transformed from serving the interests of the owners of capital-centred global monopolies to serving the needs of the peoples and communities in each country where it is based. For example, whilst Tata Steel claims to aim to “create an overall benefit for society”, the real aim of these monopolies is to eliminate their competition so as to profit from such vital sectors of the economy which have been built by the accumulated added value of steel workers in each country over decades. Such monopolies ruthlessly close down steel works and wreck national economies, the lives of steel workers and their communities as Tata Steel attempted in Redcar in 2010, and US steel is attempting in Canada and in other countries.

Canadian steel workers on May Day saying no to the wrecking
of the Canadian steel industry and pensions by the US Steel monopoly

The history of steel-making in Britain bears this out. The British Steel Corporation had been brought into state ownership of 90% of British steel making in 1967. But because the working class and people did not have control of their own state and economy it became instead a crisis of state monopoly capitalism, where the financial elite represented by Thatcher demanded that it be broken up, sold off and directly controlled by them for maximum profit regardless of the devastation of the lives and communities of workers in steel. In the 1980s, the steelworkers fought a bitter battle against the dismantling of the industry in a 13-week national strike. Margaret Thatcher brought in Ian MacGregor to oversee this destruction, which more than halved the workforce from 268,500 to 130,000. Corus was formed in October 1999 through the merger of British Steel and the Dutch monopoly Koninklijke Hoogovens. In April 2007, Corus itself was taken over and became a subsidiary of Tata Steel, as Tata Steel Europe. Today, steel workers continue to fight to save the steel industry and oppose the job losses and wrecking of the industry. The people of Teesside and the Blast Furnace steel workers fought to re-open their steel plant in Redcar after its closure in 2010 and it re-opened in 2012 under the ownership of Thai steel company SSI. At this time, Tata Steel employs 50,000 in Europe with around 21,000 in the steel industry in Scotland, Wales and the north of England and the Midlands.

This whole history of steel-making underlines that the economy is based on social production and that the privately owned capital-centred economy will only further wreck steel production and all that vitally accumulated wealth and skills of the workers. The working class must take up its own independent programme for society and build its Workers’ Opposition that ends this wrecking and demand a modern economy that is capable of uninterrupted extended reproduction, where more is put into the economy than is taken out. A new direction that will start to end the vagaries of the present global economy and contribute to charting a way out of the crisis and building in its stead a modern socialised economy.

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