Monday 26 September 2016

Dutch steel workers fear they'll share the fate of Port Talbot

Barbara Lewis and Andy Bruce

Published 01/06/2016 | 02:30

The sun sets behind the Tata Steel plant at Port Talbot. Photo: Getty Images
The sun sets behind the Tata Steel plant at Port Talbot. Photo: Getty Images

With Tata Steel's troubled British operations up for sale, Dutch workers at its only other European site for primary steelmaking are in defensive mood, and yet the plant may have a bright future.

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"We won't let them wreck our plant" is their motto, directed at top managers of the Indian-owned group; some of the 9,000 staff at the IJmuiden plant on the Dutch North Sea coast even wear it to work on their safety helmets. The slogan dates from contract talks last year but shows their defiant spirit during uncertain times for a European steel industry beset by overcapacity and cheap Chinese competition.

More than 11,000 jobs are at risk at Tata's British plants but in the Netherlands, IJmuiden has several advantages - not least that it is excluded from the British sale process and, industrial sources say, it makes a profit.

Tata reported an overall loss for its European steelmaking operations of $90m (€81m) for the financial year 2015-16, which analysts said equated to $15 per tonne.

The company won't break down the figures but the British operations - including the country's biggest steelworks in the South Wales town of Port Talbot - are estimated to have lost more than £1bn (€1.3bn) a day.

By contrast, the industrial sources put IJmuiden's profit margins at about 3pc, albeit down from around 30pc in 2007 at the peak of the steel boom that has since turned into a bust.

Dutch trade union leaders say returns would have been higher if Tata's leaders hadn't diverted investment to Britain, in the hope of correcting a history of poor performance and underinvestment in the steel industry there.

"We're very sorry for the English, but they should have invested here," said Peter Kos, a 65-year-old union official who has been a steelworker at IJmuiden since he was 16.

Tata will not disclose all figures, but a spokesman said it has invested £1.5bn on upgrading the British plants since it bought the Anglo-Dutch steelmaker Corus in 2007 and "broadly the same across the main European operations".

Another Dutch union official said the bulk should have gone to the Netherlands.

"If they had invested the money in IJmuiden, we would have been top of the world," said the FNV federation's Aad in 't Veld.

Notwithstanding such intra-plant rivalries, both Dutch and British workers say Tata has been a good boss, but - at least for Britain - the investment came too late.

Problems in the British steel industry long predate Tata's involvement. As state-owned British Steel, it was often starved of investment to modernise plants. Then after privatisation in 1988 it came under different pressures.

According to Peter Joustra, a former managing director at the IJmuiden plant, the British operations fell victim to short-term investment decisions aimed at pleasing shareholders.By contrast, he says the European model of business helped to protect the Dutch plant, founded in 1918 by the Koninklijke Hoogovens firm, and to ensure a long-term investment strategy focused on innovation.

British Steel and Hoogovens merged in 1999 to create Corus, the firm Tata bought eight years later after a bidding war that pushed the price up to $12.9bn.

At the time, China's demand seemed almost insatiable, but the economy there is now slowing sharply. (Reuters)

Irish Independent

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