Steel giant’s restructure threatens more than 400 jobs
Liberty Steel has placed 440 jobs at risk as it confirms plans to cut production and idle some of its smaller plants in a restructuring drive.
Owned by Sanjeev Gupta’s Gupta Family Group Alliance (GFG), the steel manufacturer says it’s been hit by high energy costs and severe competitiveness issues means a restructure is essential.
Operations in West Bromwich will be idled, with Liberty Steel’s steelmaking activities at Newport in South Wales will be turned into a storage, distribution and trading hub. Its operations in Rotherham will be shifted towards the development of premium products, with production at the electric arc furnace to be reduced.
Its statement said: “Despite the injection of £200m of shareholder capital over the last two years, the production of some commodity grade products at Rotherham and downstream mills has become unviable in the short term due to high energy costs and imports from countries without the same environmental standards.
“Primary production through Rotherham’s lower carbon electric arc furnaces (EAFs) will be temporarily reduced while uncompetitive operating conditions prevail.”
Unite the union says that in announcing these redundancies Liberty Steel has “failed to consult in any way with the trade unions at the company” and that its behaviour in not informing with trade unions is “disgraceful”.
Unite national officer Harish Patel said: “Unite will be demanding forensic scrutiny of all aspects of Liberty’s plans following the announcement of these potentially massive redundancies. We will utilise every element of the union’s power to challenge these plans and their consequences for the long-term future of the Tredegar, Newport and West Bromwich sites.
“The government has also a case to answer: Steel manufacturing is a sector of critical national importance, both for the nation’s self-sufficiency and the thousands of jobs it supports. Ministers must come up with a plan to solve the astronomical energy prices that are crippling the sector. The ball is in their court on this crisis – they cannot walk on by again.”
The company is looking to recover from a turbulent period that began with the collapse of its key lender Greensill Capital. It says the measures would help safeguard the jobs of its wider workforce of 1,900 employees.
It reached an outline deal with creditors in November, which The Financial Times say could see those owed recouping a maximum of 55% – however, the figure is expected to be significantly less. The deal would incorporate all major Greensill creditors; Credit Suisse Asset Management, Greensill Bank and Greensill Capital.
Liberty had been facing several winding-up petitions, but all parties adjourned them.
The group said it aimed to find a similar deal to restructure the debt for its European steel business.
