[Marxism] Steel Mill’s End Puts Upheavals of Modern Britain on View
lnp3 at panix.com
Tue Oct 20 08:55:51 MDT 2015
(The irony is that the steel mills were owned by Thai and Indian
NY Times, Oct. 20 2015
Steel Mill’s End Puts Upheavals of Modern Britain on View
By KIMIKO DE FREYTAS-TAMURA
REDCAR, England — This small town on the North Sea, famous for a
century-old mill that produced the steel for some of the world’s most
iconic bridges, has been shattered by the news that the plant is about
to shut forever, taking 2,200 jobs with it.
The upheavals of postindustrial Britain were on display one recent
evening at O’Grady’s, a local pub, as steelworkers shared their sorrow
just a few feet away from a businessman who sells cheap Chinese steel to
the British government, something many in Redcar complain about.
“Everyone’s going crackers,” said Conrad McCormick, 38, a married father
of two who lost his job at the mill, which made steel for the Sydney
Harbor Bridge in Australia, the Victoria Falls Bridge in Zambia and 1
World Trade Center in New York.
“The only thing I’m sure of in my life right now is this,” he said,
holding up a pint of beer.
Across the pub, also pint in hand, stood Jim, a 61-year-old businessman
who declined to give his surname. Jim said his midsize company was doing
well selling Chinese and other foreign steel to the government to build
railways, wind farms and public buildings.
Britain “is saving money and cutting the public deficit by importing
cheap material from abroad,” he said.
The final closing of the Teesside Steelworks plant, founded in 1917 and
most recently owned by Sahaviriya Steel Industries of Thailand, was
announced on Oct. 12. Earlier in the month, the British unit of
Sahaviriya, which operated the plant, filed for bankruptcy, and the coke
ovens were kept burning amid talks of a takeover by another company. But
those talks fell through. Once the coke ovens go cold, there is very
little chance of restarting the plant.
The same forces are also buffeting another steel company, Tata, which
announced on Friday that it was slashing 1,200 jobs in Britain, or 7
percent of its work force there.
The government has announced a compensation package worth 80 million
pounds, or about $123.5 million, for the Teesside workers, involving
retraining and money for start-ups, but the latest crisis was the final
nail for the famous steelworks.
Redcar, a northeastern England town of just 35,000, is in a region
already suffering from Britain’s highest unemployment rate — 8.5
percent, three points higher than the national figure. At least 10
percent of young people here are unemployed, and hundreds of
steelworkers on contract have been fired in addition to the 2,200 employees.
Once renowned for its solid industrial jobs, the town is now famous for
its “charity shops, pubs and takeaways,” said Claire, a 35-year-old
nurse who is married to a steelworker.
Without steel, Redcar offers little else to the world, except for modest
summer seaside tourism. Even then, it is badly served by the local rail
network — a slow, four-carriage train on rickety tracks — and British
tourists find it easier to fly to Spain.
“It’s such a small town, it’s forgotten by everyone else,” said Alan
Bunn, 38, another steelworker who has been laid off.
The loss of Redcar’s competitiveness is on open display: Even the soccer
stadium in the nearby city of Middlesborough was built using German
steel. An offshore wind farm in the sea near the town was built with
German and Belgian steel.
An official at EDF Energy Renewables, which operates the wind farm, said
the company’s policy was to use local material. But local steel was
found to be “not up to par with the company’s standards of quality,” the
official said, speaking on the condition of anonymity because of the
sensitivity of the issue.
The government is trying to spur the economies of larger northern cities
like Manchester and Leeds, but not those quite as far north as Redcar.
Its streets are lined with shuttered stores; there are 12 charity shops
and six pawnshops. Cafes, restaurants and hotels that once relied on
hundreds of contract workers are empty.
The only other large-scale employer in Redcar is Sembcorp, an energy
company based in Singapore that employs 270 workers here.
“No one really cares about the northeast,” said Mr. Bunn, the
steelworker. “You grow up feeling that way. It’s common knowledge.”
Politicians have lost a lot of credibility among Redcar residents, he
said, and voters are rejecting the dominant parties to register protest
votes instead. In the May election for a parliamentary seat, the local
candidate for the anti-immigration U.K. Independence Party did well,
coming in just shy of second place.
Residents and workers like Mr. Bunn acknowledge that job losses are
inevitable in a market economy. But there is widespread anger at the
government for appearing to abandon the steelworks and the community.
Workers and local employers say they want a robust industrial plan to
level the playing field for British steel makers. For example, they say,
Britain’s environmental taxes and energy prices, which are the most
expensive in Europe, must be reduced. They also want the government to
impose higher tariffs on Chinese imports and require companies and
public works to use local sources for some of their material.
“It’s not that we’re trying to pick on China,” said Gary Klesch, a
British-American businessman who this year decided against buying a
Tata-owned steel plant in Scunthorpe, about 70 miles south of Redcar,
citing high energy costs and taxes. China gives its steel industry
stronger support than Britain does, he said, “and while China doesn’t
break trade rules, they are bending them.”
The Conservative government of Prime Minister David Cameron has ruled
out that kind of intervention.
Jason Raj, a spokesman for the Department for Business, Innovation and
Skills, said the government had “taken action to help steel makers by
paying £47 million for compensation for energy costs.” In July,
Parliament voted to extend tariffs on Chinese wire rod products that
Britain believes are priced below fair market value, he said, and “will
consider further cases as they arise.”
To Peter Atkinson, 56, the latest crisis is nothing new. He retired from
the mill in 2010, when it was being sold to its current owners. Its
owner then, Tata Steel of India, had laid off 1,700 workers after a
contract ended. Now his 26-year-old son, also a steelworker, is out of a
“It’s nice to look after other people in the world,” he said, alluding
to a recent announcement by George Osborne, chancellor of the Exchequer,
about a £3 million plan to teach soccer in China. “But sometimes you’ve
got to look after your own.”
There is a lot of griping in Redcar about China, which the Cameron
government is hotly pursuing for trade deals. China produces half the
world’s steel, and its dominance resonates here because Britain, too,
once produced half the world’s steel.
China has vast steel stockpiles, amassed during the years after
Beijing’s stimulus package in 2008. But now that its economy is losing
steam, China is selling its steel at prices that British steel makers
struggle to match.
Britain imported 60 percent of its steel last year, according to UK
Steel, an industry lobby; Chinese imports make up 8 percent of Britain’s
demand. The figure seems low compared with other competitors from
Europe, the Middle East and Russia, said Gareth Stace, the director of
UK Steel. But the pace of Chinese imports is alarming, he said,
quadrupling in a matter of months.
Back at O’Grady’s, Mr. Atkinson took a philosophical view. “We were born
and bred steelers,” he said. “But at the same time, we need to realize
that everything has a life span.”
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