Up to 440 jobs affected as Liberty Steel begins next phase of restructuring

Liberty, part of the GFG Alliance, said it will offer an alternative to redundancy through a programme which aims to retain, redeploy and reskill affected workers.

Workers will be offered a level of guaranteed salary and outplacement opportunities, with the intention of being redeployed within Liberty Steel UK on previous employment terms when market conditions allow.

The company said the measures will forge a “viable way forward” for the business and help safeguard jobs in its wider workforce of 1,900 permanent employees, and up to 5,000 including contractors.

Jeffrey Kabel, chief transformation officer for Liberty Steel Group, said: “Refocusing our operations will set the right platform for Liberty Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities.

“The support of our marquee customers will enable us to produce high-value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy.

“We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a two million-tonne green steel hub.

“While our action is expected to regrettably impact the roles of some of our workforce, we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy.

“Liberty’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”

Liberty said in a statement: “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.

“These actions together with the idling of Liberty Performance Steels in West Bromwich and the reconfiguration of Liberty Steel Newport into a storage, distribution and trading hub, may potentially impact up to 440 roles across the business.

“The company will consult with employee representatives, trade unions and UK Government throughout the process.”

Alun Davies, national officer of steelworkers union Community, said: “This announcement is a body blow to Liberty Steel’s loyal UK workforce, who couldn’t have done more to get the company through an exceptionally challenging period.

“Since the collapse of Greensill Capital, the trade unions have supported the company because we believed that delivering the company’s business plans – which were audited and backed by the unions’ independent experts – was the best route to safeguard jobs and the future of all the businesses.

“However, the plans we reviewed were based on substantial investment and ramping up production, including at Liberty Steel Newport, and did not include the ‘idling’ of any sites.

“These are challenging times for all steelmakers but the company’s decision to change their plans, on which we based our support, and announce a strategy seemingly based on capacity cuts and redundancies, is devastating.

“The consultation on these proposals must be meaningful and the unions will be scrutinising the detail of plans to idle Newport, West Bromwich and Tredegar, including Liberty’s commitment to restart the plants when conditions allow.

“Government must play their part, stop the dithering and act to deliver the competitive energy prices our industry so desperately needs. Steelworkers have had enough of warm words, it’s past time for government to decide whether it wants a steel industry in this country.”

Sarah Champion, Labour MP for Rotherham, said: “I am sickened and beyond angry that a decade of failure from the Conservative government on steel has led us to the point where 185 Rotherham and Sheffield steel workers face losing their livelihoods.

“It is not just 185 jobs, it is 185 families, the businesses in the supply chain and the economic identity of our town.

“Rotherham steel workers have been abandoned to their fate by a Government that has never understood the importance of our steel industry or made any effort to develop its enormous potential.

“There are simple steps the Government could have taken to prevent this; buy British steel for Government projects, provide competitive energy costs and address punitive business rates.

“Europe supports its steel industry – why won’t this Government?

“For 10 years I’ve told the Government what needed to happen to ensure our steel industry could thrive. They have done nothing and it is Rotherham families who will pay the price for their negligence.”

The Government remains committed to ensuring a “sustainable future” for the UK steel sector, Downing Street has said following the announcement by Liberty Steel of the next phase of its restructuring programme.

The Prime Minister’s official spokesman said reports of potential job losses at the firm were “concerning” but that ministers would continue to offer “extensive support” to the sector.

“Obviously it will be concerning for workers at Liberty Steel. We are committed to ensuring a sustainable future for the UK steel sector. We want to work closely with the industry to achieve this,” the spokesman said.

“Alongside that we will continue to provide extensive support to the sector.”

Shadow business secretary Jonathan Reynolds said: “This is devastating news for Liberty steelworkers, their families and the community built around this proud industry.

“Labour wants to see a thriving domestic steel sector, that is why we will partner with industry, investing in green steel over the next decade to keep jobs in the UK for generations to come.

“Endless sticking plasters from the Conservatives have left our UK steel sector on the brink.”