Tata Steel Is Set To Pull Out Of All Its UK Operations…

The former First Sea Lord and Chief of the Naval Staff has told the BBC that it would be “unforgiveable” if large scale steel production ended in the UK.

Speaking as the fate of thousands of steel jobs hangs in the balance, Lord West said that UK production was vital for the defence sector.

He argued that all countries that are members of the United Nations Security Council had major steel plants to support their defence industry.

“I cannot think of another major military power that doesn’t have its own indigenous steel production capabilities,” Lord West told the BBC.

“Certainly none of the members of the UN Security Council have jettisoned that capability and I find it extraordinary to think that we as a nation would do that.”

Lord West, the former security minister in Gordon Brown’s government, and now a member of Parliament’s Joint Committee on National Security Strategy, said that having an indigenous capacity was vital.

“Steel is fundamental to industrial output,” the Labour peer argued.

“It’s seen as one of the key things that a nation produces.

Here we go, here’s another product of my choosing – tanks. You’re going to tell me that we buy them made in Switzerland?

Basically, yes. Britain’s last ‘tank’ factory closed years ago…..and our latest purchase of ‘tanks’ will be American.

The only ‘precedent’ that comes to mind is the Dunkirk debacle. We were up against a pretty ‘determined opponent’ then as I recall, before the army was rescued off the beaches.

The army lost close to 100% of its equipment; tanks artillery, vehicles, machine guns etc. They arrived in Britain with not much more than the clothes on their backs. Nine months later, all that had been lost had been replaced with the help of a very effective steel manufacturing industry – among other things.

All ‘the steel in the world’ DID help us then because in all probability, most of it was in this country ! No need to remind me that we had at that time, to buy small arms from America to equip the Home Guard. That was due to an over stretched manufacturing capacity.

We went on to sustain not only ourselves with a wide range of military equipment but also, Russia, the many countries of the Commonwealth and America. As far as America was concerned, the numbers were limited only by what we could spare from our production and it was never enough.

Steel production was never a problem despite restrictive working practices by the unions.

Read David Edgerton’s “Britain’s War Machine” for the full story of Britain’s wartime production. It is astonishing. You are welcome to borrow my copy.

Charlie, quite so. That is the real issue. As far as I can tell, TATA have invested heavily in steel plants in the UK, but it hasn’t borne fruit in terms of profitability.

John, I do take your point, but just ask yourself how long we would hold out against a determined opponent in any case. All the steel in the world would not help us then. Our armies and Air Force are pitifully small now, and even the heads of those forces have stated their concerns.

Bruce

The fact remains that from our own manufacturing resources and irrespective of its design origins, we produce enough of a wide variety of weapons to conduct effective, conventional, military operations. If we lose home grown steel making we lose the ability to manufacture heavy weapons especially shipping and as a maritime nation we might well be as dependent as ever on our Navy, altho’ Heaven help us if that dependence is determined by the caliber of recruits seen recently on our TV screens.

Surely the real point about this fiasco is that trade in a manufactured product is not carried out in isolation.

We should be looking for the reasons the plant loses £1 million per day, and addressing them, instead of talk of nationalisation and throwing more borrowed money after bad. If the plant produced competitively it would be exporting steel perhaps to be used by the very same manufacturers overseas you have referred to. If the Dutch plants are profitable and deserve Tata investment, why aren’t the UK plants?

I don’t have the answers but I haven’t even seen the questions asked. I sincerely hope they can be saved but only if they prove commercially viable.

John,

F-22. Not a stop gap – a front line fighter aircraft. Am I being selective? Of course, but I’m not going to look at every single item in our inventory.

That said, if we look at some of the aircraft currently being used by the RAF:

Hercules – American – No British equivalent. )A400 coming into service is partly British)

Chinook – American, No British equivalent

AWACS – American, No British equivalent, and ordered because we couldn’t get the Nimrod AEW3 to work!

Apache – American, No British equivalent.

We use UAV’s from America, and another originally designed in Israel.

Very quickly looking a very small selection of the army equipment, about which I know little, we order guns from Heckler and Koch, use a machine gun designed in Belgium, the Sharpshooter rifle is American and a Mortar from the 1960’s, designed by the Canadians. The Warthog AFV is from Singapore, the Husky is American.

Yes, I have avoided mention of those items that are wholly British, but I think you take my point.

So, nonsense? Not by a long shot. You are being as selective as you claim I am. Incidentally, I am not for one moment suggesting that I wish to see our steel industry close.

That’s nonsense – and you know it ! Here we go, here’s another product of my choosing – tanks. You’re going to tell me that we buy them made in Switzerland ?

Submarines ? We obviously buy them from Austria ! We have, in the past, bought infantry small arms and certain battlefield vehicles from foreign sources. primarily as a ‘stop-gap’. If they were good, we adopted the design with modifications to suit the needs of the British Armed Forces and then, manufactuired them here, in this sceptre’d isle.

My original point was that if we lose the means to manufacture quality steel in this country, we’re up against it in no uncertain terms. We’d better start being nice to everyone in the hope that they won’t cross the Channel. Now there’s a thought !

I dealt selectively, with one product of your choosing, about which I know something!

As you well know, our armed forces shop for their equipment all over the world – so if it came to the crunch, we would still struggle to defend ourselves from our own resources.

You dealt selectively – as I knew you would – with my list of hardware. I’m aware of the ‘global’ content but, it is not as ‘global’ as you would believe. I could have mentioned something called the Eurofighter; it is made/built/assembled all over the place. It, plus a few others, does not make the case for the predominantly globalisation of British military hardware.

Equipment for the British Army and the British Navy is manufactured primarily in house, apart from the import of those essential strategic materials that are used as ingredients in the preparation of specialised armour etc.

It’s not a question of greed by some business owner, I would guess Steel is easier/cheaper to import than to make it in the UK.

Likewise, there is money to be made in the aviation subcontract field. With the paupacy of military orders and having given up on indigenous airliners a long time ago, the business guys figured out how make money without putting their name on anything.

Advanced countries are becoming service based economies. The son of a UK friend, (the ex-MD of two well known firms) works in the well phone industry…his bosses JapAnese. He just bought a £1.5 million home. A nephew works in London, just out of university, he can afford a home in the city.
My point is…you don’t have to make something to make a lot of money today.

Nothing is stopping a well heeled investment group from buy-ing the steel company being sold…except the knowledge that their investment would probably be better doing something else.

Of course that doesn’t stop some from complaining about the “bloody foreigners buying up everything”…from entire industries to old aircraft. A lot of the time they’re successful because on one in the UK wanted to buy it.

John,

The 146 hasn’t been in production for a long time, but actually it’s a good example. The wings were made in the USA, as well as the engines. Wiring; American. Instruments and avionics likewise.

This is a global business. They source parts from wherever is cheapest. Yes, many of those products are assembled here, but wholly manufactured? Not for a long time.

Bruce

After reading your comment, I swallowed hard and wondered what it was that my tax pounds had been up to for the last umpteen years !

Currently Gt. Britain Ltd. manufacturers from its own resources the following :

Military aircraft big and small, slow and fast – BAe 146 to the Hawk in this country. In addition we co-operate in MAKING in this country significant numbers of parts for other joint venture aircraft including helicopters.

Ships; Two socking great aircraft carriers, wholly built here (provided you count Scotland as ‘here’. Minesweepers, frigates, submarines, landing craft, fleet auxiliary support vessels, fisheries patrol craft, to name but few.

Big guns; howitzers, portable anti tank weapons, missiles, smart bombs, grenade launchers, grenades, torpedoes etc. all made in this country.

Tanks, small tanks and big ones, armoured personnel carriers, bridge laying tanks, soft skinned vehicles.

Small arms, mortars, ammunition of all shapes and sizes.

All of this is made ‘in house’. The one chink in my argument which I didn’t want to mention is that some of the raw materials for the goods that I’ve mentioned has to be imported from foreign sources. It isn’t just Britain that does this, it is everyone who manufactures the goods in question. Even those countries that are pretty well self sufficient have to import certain strategic materials in order to produce.

We can look after our strategic necessities but steel production is central to our needs and with the way that the world is shaping, who can say that we will not need to exercise an awful lot of military muscle sometime in the future.

But if the Americans can have the political will and acumen to erect massive tariffs to protect their steel industry and they have the distinct advantage of relatively cheap power then, its fairly obvious that we need to do the same to protect a vital industry.

I admit to a bias. I’m an enthusiastic interventionist when it comes to the economic protection of vital national industries. Power generation and water supply are just too important to be left to the vagaries of the marketplace. They should have remained at all costs under State control WITHOUT the heavy hand of trade unions always ready to stir industrial action and restrictive working practices among the workers.

That’s the key. IF the business could be run profitably. That’s the only secret to finding a buyer. And if the heavy hand of UK taxation, energy subsidies and whatever else is contributing to excessive costs, is addressed, then perhaps there’s a chance of rescue.

Geoff,

All Steel is not made equal. If you specify a steel type for (your example) railway tracks, it will be made to a certain specification. That can be achieved in many different countries, by many different companies. If the specification is the same, and the only difference is price, then what happens?

Sadly, I think we are seeing the end game for British Steel being played out. In the case of the financial services, there was at least a chance that their problems would resolve once the crisis worked its way through – which in the main, and duff mortgage books notwithstanding, they have.

Beermat – I don’t see the tory ideology stopping state intervention at this time – if there is a chance of finding a buyer in the short to medium term, AND if the business could be run profitably, or at least not at a horrendous loss. If, as I pondered above, there is a big drag on the balance sheets from the cost of purchase, and investment, there might be a possibility of restructuring. I just don’t know.

“idealogical bar”

Nor in America, where domestic steel production is protected by tariff barriers the size of which you would not believe.

Comrade Beermat checking in.. 😉

Actually I don’t blame this Conservative Government in particular for any of this, but a bit of state intervention might be useful at this point, something which ideology prevents them from doing.

Oddly enough this ideological bar on countering market forces does not apply to the financial sector, as per Bruce and Charlie’s observations, nor to the housing market, where money is being pumped in at the bottom by Government.

Hi All,
Is not the real reason why the Steel industry has gone **** up simply because of greed by those who sold the steel industry down the rivers ? Of coarse like the reasons Charlie mentioned you can factor those in to the collapse as well, as with the vast quantities of cheap steel coming out of China at the time, even they have had to cut back IMO because they flooded the market and now just ruined it for all country’s who rely on their steel industry’s.

Not only was the steel cheaper to produce allegedly it was inferior to the UK steel. You only have to look how it bends when they are laying new rail tracks it’s like rubber In some film shots I have seen. A neighbour (RIP Alf) once told me his brother in-law worked in the steel manufacturing side and had him and his wife stay in Sheffield many moons ago. He said the way the steel was produced then compared to how it is produced now you would think it was two different types of steel, he said it never used to bend the way it does now so I can only deduce from that the steel is of a softer compound for whatever reason. ??

Apart from the above you could see it a mile off that TATA would shut down our industry first because we just cannot compete with other country’s who are producing steel for them as a company, I think that they will close even those that are making profit so they could keep their own plants in India going IMO.

Geoff.

Customer deposits not withstanding, the banking industry should have been allowed to fail – it should have been done in a controlled manner, but companies that demonstrated their inability to run their own affairs should have gone to the wall, and their business picked up by those who had a rather better record. Easily said, more so in hindsight.

Without knowing all the facts, I’m not going to make a pronouncement on what should happen. Ultimately, the blame lies with those who demand cheap goods – ie the consumer based society in which we live. Lots of people want to blame the Tories – but it isn’t specifically their problem, or an issue with being part of the EU – its much, much bigger than all of that.