UK Steel Crisis

[Dave1987]

Again as sad as the huge job losses are we need to take into context what the problems are here. On the Beeb News it was said that poor exports due to a strong pounds and China dumping vast quantities of steel on the market due to their own economic slow down is to blame. We cannot force other countries to buy our steel over Chinese steel, yes we could ban Chinese imports of steel but considering the huge amount of businesses that rely on other products coming out of China that would be suicide for us. The one thing the Govt could do is stipulate that the Govt will give contracts out to companies that buy British. But still there is only so much steel the country needs. If these plants were nationalised to save the jobs then the taxpayer would be subsidising the production of steel at a loss. We need to consider what the long term future demand for steel in this country is and ensure that demand is met in this country. Apart from that we would just be subsidising cheaper steel for other countries.

 

[muz379]

Again as sad as the huge job losses are we need to take into context what the problems are here. On the Beeb News it was said that poor exports due to a strong pounds and China dumping vast quantities of steel on the market due to their own economic slow down is to blame. We cannot force other countries to buy our steel over Chinese steel, yes we could ban Chinese imports of steel but considering the huge amount of businesses that rely on other products coming out of China that would be suicide for us. The one thing the Govt could do is stipulate that the Govt will give contracts out to companies that buy British. But still there is only so much steel the country needs. If these plants were nationalised to save the jobs then the taxpayer would be subsidising the production of steel at a loss. We need to consider what the long term future demand for steel in this country is and ensure that demand is met in this country. Apart from that we would just be subsidising cheaper steel for other countries.

This is purely academic now and I really dont like being pedantic or academic about things with such a huge human cost but here goes

Would the taxpayer subsidizing the production of steel at a loss be worse than the amount of money the taxpayer is going to end up paying to the workers who have now lost their jobs in the form of benefits of some sort ?Not to mention the wider economic costs this is going to have on the region . And obviously owing to the fact that there is going to have to be some sort of strategic funding of retraining opportunities for people who could have only ever known working in the manufacturing industry .

 

[Dave1987]

This is purely academic now and I really dont like being pedantic or academic about things with such a huge human cost but here goes

Would the taxpayer subsidizing the production of steel at a loss be worse than the amount of money the taxpayer is going to end up paying to the workers who have now lost their jobs in the form of benefits of some sort ?Not to mention the wider economic costs this is going to have on the region . And obviously owing to the fact that there is going to have to be some sort of strategic funding of retraining opportunities for people who could have only ever known working in the manufacturing industry .

Don't get me wrong I understand where you are coming from but if you are going to use that argument then you would have to apply that argument to every business that goes under. Then you get into a situation where the businesses and industries that are viable subsidies those that are not. Remember when CityLink went bust? Should the taxpayer have subsidised that business? Where does it end?

 

[muz379]

Don't get me wrong I understand where you are coming from but if you are going to use that argument then you would have to apply that argument to every business that goes under. Then you get into a situation where the businesses and industries that are viable subsidies those that are not. Remember when CityLink went bust? Should the taxpayer have subsidised that business? Where does it end?

I understand where you are coming from as well however disagree that you would have to apply that argument to every business that fails . In fact in the rail industry does the government not kind of already do a version of this like when National express ballsed up the east coast franchise the government stepped in ?

I would argue with this geographic area and this industry the job losses are harsher than those experienced by people in your example of city link . There are many employers out there still doing what city link did and many of the front line staff like drivers and depot workers will not struggle to find jobs in exactly the same industry that they have the skills to work in . Whereas in the Tees valley region finding new jobs for people who might have only ever worked in manufacturing is going to be harder .

I dont think for one minute we should blindly go into subsidizing failing business at every opportunity for an indefinite period of time but I personally cannot help but feel in this case if a period of subsidized operation could be helpful whilst the government decides a long term solution to the problem of china dumping cheap steel over here .

 

[47802]

So the Stainless Steel company I worked for lost about 1000 jobs between 2005 and 2008 with 2 plant closures. Not much was done about that, and of course it was a Labour Government in charge then.

If you look at the decline of manufacturing in the UK since the 1970's its declined at a fairly constant rate over the years regardless of which party was in government and yes that includes the period Thatcher was in charge.

Essentially a lot of bog standard Manufacturing has gone to China over the years because its cheaper should steel be any different?

 

[Xenophon PCDGS]

I personally cannot help but feel in this case if a period of subsidized operation could be helpful whilst the government decides a long term solution to the problem of China dumping cheap steel over here .

Do you, for one single moment, think that China will listen to one single word of whatever colour of British Government will have to say on that matter of China flooding the world with cheap steel. As long as China still bolsters the American financial establishment with loan after loan that will eventually have to be repaid, then there you have the Chinese priorities in a nutshell.

Do you suggest closing down all the Chinese fish and chip shops in Britain as the biggest feasible British riposte to China...:roll:

 

[ainsworth74]

Do you suggest closing down all the Chinese fish and chip shops in Britain as the biggest feasible British riposte to China...:roll:

Wait... There are Chinese fish & chip shops? Not sure I've ever come across that before!

 

[Domh245]

Wait... There are Chinese fish & chip shops? Not sure I've ever come across that before!

A lot of the fish and chip shops that I know also happen to be chinese restaurants. It may have been the other way round (chinese takeaway diversifying to sell fish and chips) but it's the situation there is at the moment.

Then there are also the fish and chip shops run by chinese people but not selling any chinese food

 

[Dave1987]

So the Stainless Steel company I worked for lost about 1000 jobs between 2005 and 2008 with 2 plant closures. Not much was done about that, and of course it was a Labour Government in charge then.

If you look at the decline of manufacturing in the UK since the 1970's its declined at a fairly constant rate over the years regardless of which party was in government and yes that includes the period Thatcher was in charge.

Essentially a lot of bog standard Manufacturing has gone to China over the years because its cheaper should steel be any different?

This is exactly the point! Where do we draw the line on which businesses are 'not allowed to fail'? If we are talking about employability of the redundant workforce would it not be better to retrain them to be able to work in a different industry rather than subsidise their current industry. As far as the steel industry is concerned we should have enough capacity to produce what our country needs, but apart from that it should be left to market forces.

 

[Haydn1971]

As far as the steel industry is concerned we should have enough capacity to produce what our country needs, but apart from that it should be left to market forces.

We haven't had that capacity for a very long time !

UK Steel production shortfall

 

[NSEFAN]

We haven't had that capacity for a very long time !

It is the same for many sectors. It is said that we are always about 3 days from starvation.

 

[Xenophon PCDGS]

Then there are also the fish and chip shops run by chinese people but not selling any Chinese food

Perhaps that may be more the case in the area where you live.
--- old post above --- --- new post below ---

It is the same for many sectors. It is said that we are always about 3 days from starvation.

Giving my age away somewhat, but do certain large organisations still use the "Just in time" methodology of procurement?

 

[47802]

This is exactly the point! Where do we draw the line on which businesses are 'not allowed to fail'? If we are talking about employability of the redundant workforce would it not be better to retrain them to be able to work in a different industry rather than subsidise their current industry. As far as the steel industry is concerned we should have enough capacity to produce what our country needs, but apart from that it should be left to market forces.

Well to some degree I was playing devils advocate, and I do think we should try and support our remaining UK manufacturing where possible, but where you draw the line is a difficult one. In any case I doubt this government will do very much anyway.

 

[ainsworth74]

Giving my age away somewhat, but do certain large organisations still use the "Just in time" methodology of procurement?

As far as I'm aware the vast majority of small, medium and large organisations use 'Just in time' for their procurement!

 

[Dave1987]

Well to some degree I was playing devils advocate, and I do think we should try and support our remaining UK manufacturing where possible, but where you draw the line is a difficult one. In any case I doubt this government will do very much anyway.

Yes but define "support" though. There are many many different ways you could classify this.

 

[Pinza-C55]

And how long would the taxpayer have to fund a private company who decided to mothball the works to keep the works open to keep everybody in work?

Should that be extended to everybody who losses their job as a result of site closure/company closing completely?

I haven't bothered reading the replies on this thread but I suspect that many of them will be from people who are less than 35 years old and thus have no memory of the days when "Great Britain " actually meant something in the world. The only thing you can really say is that when the UK declines from its current 10% manufacturing base to 0% they will continue to make excuses for us and the rest of us will laugh our heads off. By then it will be too late of course.

 

[w1bbl3]

We haven't had that capacity for a very long time !

UK Steel production was 11.9mt so actually we as country produce more steel than domestic demand requires... http://www.eef.org.uk/uksteel/About-the-industry/Steel-facts/Output-UK.htm or http://www.eef.org.uk/uksteel/About-the-industry/Steel-facts/UK-steel-mill-deliveries.htm same report BTW.

Since the mid 90's the UK share of domestic demand has fluctuated between 40% and 60% of production with the balance of production being exported to countries mainly within the EU.

The trade balance in 2013 was positive to the tune 0.475mt, the 2014 figure once published will IIRC show another positive balance.

The current issue is that mainly Chinese mills are prepared to produce steel flats, bars, section and coil explicitly graded to EU standards for the EU market at far below the cost of production, this has forced all the EU mills to sell at similar prices. The current price is basically at 2001 levels which is unsustainable for global industry.

 

[Tetchytyke]

The current issue is that mainly Chinese mills are prepared to produce steel flats, bars, section and coil explicitly graded to EU standards for the EU market at far below the cost of production

Clearly the Chinese government are prepared to support their businesses by doing this, so what is wrong with our government doing the same?

Don't get me wrong I understand where you are coming from but if you are going to use that argument then you would have to apply that argument to every business that goes under. Then you get into a situation where the businesses and industries that are viable subsidies those that are not. Remember when CityLink went bust? Should the taxpayer have subsidised that business? Where does it end?

I take your point, though I think the CityLink (and the Phones4U) situation was very different, mostly because those businesses went bust because of asset-stripping venture capitalists. And I also think there is a bit of a difference between something like steel production, which once it goes cannot be replaced, and courier services.

 

[Xenophon PCDGS]

Clearly the Chinese government are prepared to support their businesses by doing this, so what is wrong with our government doing the same?

Money is no object to the Chinese government who seems to have lots of this to lend to America, whereas Britain is "strapped for cash" in comparison to China.

Amazing to compare the scenario of a cash-rich Communist state against a money-poor capitalist state...:roll:

 

[DarloRich]

Money is no object to the Chinese government who seems to have lots of this to lend to America, whereas Britain is "strapped for cash" in comparison to China.

Amazing to compare the scenario of a cash-rich Communist state against a money-poor capitalist state...:roll:

imagine if we could export something to help reduce our balance of payments and earn much needed hard currency.................

 

[Xenophon PCDGS]

imagine if we could export something to help reduce our balance of payments and earn much needed hard currency.................

What do you propose that Britain can offer in large quantities that will be competitive on world markets in the global economy to achieve that aspiration?

 

[Tetchytyke]

Money is no object to the Chinese government who seems to have lots of this to lend to America, whereas Britain is "strapped for cash" in comparison to China.

I suspect that "seems to" is going to be the key phrase here...

 

[radamfi]

It is not simply a case of the UK vs the rest of the world. Let's suppose the UK government did subsidise a certain industry. Therefore "getting one over" on, say, China. It might give a short term benefit to a set of workers based in the UK. That's may seem all fine and dandy and there would be a negative impact on a business elsewhere in the world, but should we care about that?

As a result of lower tax revenue or lower investment in the part of the world affected, that may then have a knock on effect on other businesses around the world, which may be potential customers of UK businesses.

 

[DarloRich]

What do you propose that Britain can offer in large quantities that will be competitive on world markets in the global economy to achieve that aspiration?

Quality not quantity is the key. Although we seem to make nothing of value for export anymore.
--- old post above --- --- new post below ---
Some interesting comments from Steve Gibson who is owner of the Bulkhaul Chemical Transportation Company and Middlesbrough Football Club aimed at local Conservative MP and "Minster for the Northern Powerhouse" James Wharton.

Evening Gazette
Boro chairman Steve Gibson slams 'absolute clown' James Wharton over SSI collapse

http://www.gazettelive.co.uk/news/teesside-news/boro-chairman-steve-gibson-slams-10286826

As an aside Mr Wharton does not want to make an enemy of Mr Gibson. The phrases local hero and local boy made good do not adequately describe his standing on Teesside

 

[muddythefish]

Further gloom for the steel sector. News today that steel producer Caparo is to go into administration, threatening another 1,800 jobs in the industry.

http://www.ft.com/cms/s/0/e1411dbe-7662-11e5-a95a-27d368e1ddf7.html#axzz3p1g9lKHc

Caparo makes all sorts of bits and pieces that make the economy work - just the sort of company we can ill afford to lose.

Gideon's "March of the Makers" is looking very silly.

 

[Xenophon PCDGS]

Caparo makes all sorts of bits and pieces that make the economy work - just the sort of company we can ill afford to lose.

Where do you think all these "bits and pieces that make the economy work" will now come from?

 

[muddythefish]

Where do you think all these "bits and pieces that make the economy work" will now come from?

Where do you think ?

 

[Xenophon PCDGS]

Where do you think ?

Do I take it there are no other British suppliers of those items to which your posting referred to,
--- old post above --- --- new post below ---

Gideon's "March of the Makers" is looking very silly.

I see that you cannot miss an opportunity to make political capital from this matter and I suppose that in your view, had there been a Labour government in office, the effects of a strong pound that makes British exports harder to sell and the glut of steel on the world market would disappear by magic...or are you secretly pleased that the Labour party are not in office and seen by all and sundry how their attempts to deal with this situation would bear forth fruit.

 

[DarloRich]

Do I take it there are no other British suppliers of those items to which your posting referred to,
--- old post above --- --- new post below ---


I see that you cannot miss an opportunity to make political capital from this matter and I suppose that in your view, had there been a Labour government in office, the effects of a strong pound that makes British exports harder to sell and the glut of steel on the world market would disappear by magic...or are you secretly pleased that the Labour party are not in office and seen by all and sundry how their attempts to deal with this situation would bear forth fruit.

I will make a party political point:

The thoroughly decent Conservative party have done sod all to avoid this problem. They could and should have done more. They should be doing more now to ensure the problem doesn't get any worse.

EDIT: The remainder was a pointless rant and has been removed.

 

[Tetchytyke]

Where do you think all these "bits and pieces that make the economy work" will now come from?

I've no idea.

In other news, we're giving a state banquet to Xi Jinping, a man who has vowed to destroy the ideas of democracy and human rights within China. Just the man for Call Me Dave to be schmoozing, following on from those bastions of tolerance Saudi Arabia.

Let's hope they're nice to us.