207 jobs set to be cut at steelworks
45 workers will lose their jobs in West Bromwich, and 162 roles will be lost at the high value manufacturing Stocksbridge plant near Sheffield as a major steel company gets rid of 207 roles across the UK.
Liberty Steel, a manufacturer of complex steel for the aerospace and energy sector, is making the move as its starts the next step in its restructuring and transformation plans, following the collapse of its key lender Greensill Capital last year, which marked the start of a turbulent 12 months.
The firm announced plans to sell its West Bromwich and Kidderminster sites last May and that the business would focus its attention on its Greensteel operation in Rotherham.
Some staff will be given the opportunity to work in Rotherham, where around 160 roles will be created at the Greensteel scrap steel recycling plant.
A consultation has been launched by Liberty with its employees and unions to complete its restructure of its special alloys businesses ahead of a possible sale or partnership.
Jeffrey Kabel, chief transformation officer at Liberty Steel Group, said the special alloy businesses remained “high-potential” businesses with products prized by customers.
He added: “The steps we’re announcing today will help ensure they are competitive in the future, with job creation at our Rotherham plant enabling us to mitigate a large percentage of role reductions at other sites.
“It sets a strong platform for Liberty’s Greensteel expansion in which we will increase recycling of steel scrap in low carbon electric arc furnaces to meet growing demand in infrastructure and construction.”
162 roles will be lost at the high value manufacturing Stocksbridge plant at Sheffield. Some staff will be given the opportunity to work in Rotherham, where around 160 roles will be created at the Greensteel scrap steel recycling plant.
The firm owned by Sanjeev Gupta relied upon Gupta and Credit Suisse, but when its main financial backer Greensill Capital went bust, it raised concerns about Liberty’s future and the 5,000 people it employs in the UK.
When the financing company went into administration, its lawyers revealed that it had around five billion dollars (£3.5 billion) of exposure to Liberty’s parent company GFG Alliance.
Liberty also owns Liberty Speciality Steels Bright Bar in All Saints Road, Wednesbury, where some of the West Bromwich staff may be able to move to.
Canaccord Genuity has been appointed as the group’s financial adviser to assist in the sale.
Alun Davies, national officer for union Community, said: “The last year has been extremely difficult and we recognise change is required to secure the future of the businesses. For too long our members have been working under a cloud of uncertainty.
“Restructuring is always challenging, but the trade unions will engage constructively in the consultation process to safeguard the interests of the workforce. Under no circumstances will the unions accept any hard redundancies; every worker who wants a job must have one.
“The company’s plans to restructure the special alloys business were reviewed by the unions’ independent experts, who found them to be credible. However, if Liberty is to move forward with a sale of the business, the steel supply chain must be guaranteed and the unions fully consulted on all aspects of the process.”
This is the latest development in the Liberty Steel story with it reported in February that up to 2,000 jobs were at risk when a winding up petition has been issued against Speciality Steel UK a division of Liberty Steel, before the petition was withdrawn last month by HMRC
The government previously rejected a request from GFG to approve an emergency £170m bailout.
Gupta received the moniker the “Saviour of Steel” when he saved jobs and assets with the purchase in 2017 from Tata Steel. However in April Tata was reported to be suing Liberty Steel over missed payments that were part of the £100m takeover deal.
This along with the collapse of Greensill has led to a turbulent period for GFG Alliance, a collection of businesses and investments owned by Gupta and his family, with the Serious Fraud Office announcing in May last year that the business was the focus of an investigation.
The agency said it was looking into “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance”.
This investigation was also followed in November 2021 by the news that French prosecutors confirmed were investigating Gupta’s business dealings.