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Unions have vowed to continue their fight to stop Tata Steel from closing its two remaining blast furnaces in south Wales after the Indian group ended its consultation with workers over the plans.
Tata on Thursday said the first blast furnace would close at the end of June, followed by the second furnace by the end of September. A voluntary redundancy process will be launched next month.
The closures will result in up to 2,800 job losses at Britain’s biggest steel producer and are part of a government-funded plan to transition to a less carbon-intensive form of steelmaking that also requires fewer workers.
Community, the steel union, criticised Tata’s decision as a “bad deal for steel”. Representatives from Community and the GMB and Unite unions met company executives in London on Thursday to push their alternative plan to keep one of the blast furnaces at Tata’s site in Port Talbot open until 2032.
Tata said it had “considered carefully” the plan but that it would have involved “significant additional costs of at least £1.6bn”.
The union plan “presents significant financial, operational and safety challenges, and delays the transition to green steel by two years”, said Rajesh Nair, Tata Steel chief executive.
“We have concluded that it is not feasible to accept their plan, and it is not affordable.”
The company announced in January a consultation on its proposals to invest £1.25bn to build a state of the art electric arc furnace, which Tata has said would secure steelmaking in the UK.
The investment includes £500mn from the government, which supports the principle of using electricity to cut carbon emissions from the sector.
British Steel, Britain’s second-largest steel producer, has so far failed to seal an agreement with the government on a similar support package.
Roy Rickhuss, Community general secretary, said Tata’s decision was a “destructive bad deal for steel” and warned that “this isn’t over — not by a long shot”. He rejected Tata’s assertion that the union’s alternative plan was “too expensive”.
Rickhuss added: “It would have returned the company to profits, and the additional capital expenditure needed to make it a reality could have been funded by an additional £450mn from the government — a drop in the water compared to what other European countries are investing in their domestic steel industries.”
The GMB called it “an unwelcome but not unexpected slap in the face”.
Community and the GMB are balloting members for industrial action. The ballot ends on May 9. Members of Unite have already voted to strike.
Jonathan Reynolds, Labour’s shadow business secretary, urged Tata not to make any “irreversible decisions about the site”.
Labour has promised to invest up to £3bn to support the decarbonisation of the industry if it wins the general election expected later this year. The opposition party is leading in the polls by about 20 points.
The Department for Business and Trade said the government was “supporting the steel industry more than any before it”.
The steel plant at Port Talbot, it added, was “losing over £1mn a day, putting it at risk of closure and threatening 8,000 jobs in south Wales and thousands more in the wider supply chain. This government has ensured the future viability of steel at Port Talbot.”