'If it shuts it will be a disaster': Rotherham fears for its steel industry

Workers tell of worry as Liberty Steel’s cash crisis threatens factories and supply chains

When he started his career in 1966, Michael Wilson could earn £10 a week working nights at the steelworks in Rotherham. “That was a very good wage for a young lad at the time,” he said.

There were two main industries in the town, mining and steel, and while the former no longer exists there, the latter is putting up a fight.

The same factory gates Wilson would pass though are now owned by Liberty Steel, part of GFG Alliance, a group of companies controlled by the entrepreneur Sanjeev Gupta. The Cambridge-educated son of Indian industrialists, he led a string of audacious acquisitions, building the UK’s third largest steelmaker.

Gupta bought the sites at Rotherham, Stocksbridge and Brinsworth in South Yorkshire and Wednesbury in the West Midlands for £100m in 2017 and was touted by many as the saviour of British steel, which had struggled with low-cost Chinese competition, but recent weeks havegiven workers fresh cause for concern.

With sales already under pressure from the Covid pandemic, Liberty Steel has been left scrambling to secure new financing after the collapse last week of Greensill Capital, a key lender to Gupta.


It emerged over the weekend that GFG Alliance is being advised by the accountancy firm PwC over its options, including whether the Greensill funding can be replaced, or if any parts of Gupta’s empire would be put into administration as an alternative.

Gupta on Friday told GFC bosses to conserve cash while it negotiated new loans. Hundreds of workers at two of Liberty’s 11 UK plants – in Rotherham and Stocksbridge – were placed on furlough from Friday night, putting them on 80% pay on the government’s Covid job retention scheme.

Some staff have been told that they will not go back to work until 14 April at the earliest but even that remains uncertain unless Liberty can be rescued. Failure would carry a heavy impact for the communities it operates in, as one of the largest local employers with 650 staff at Rotherham and 750 at Stocksbridge.

“We’re pretty much in the dark at the minute,” said Chris Williamson, a caster operative and Community union rep who has worked at the Rotherham factory for 26 years.

“If this site and Stocksbridge were to go, it would decimate both areas,” he said. “We have got scope for a profitable business, subject to getting the cash. This should be a thriving plant and I don’t think some of the reports have helped our plight.

“We have got markets, and we’re trying to build better relationships with our suppliers and customers. And as long as that remains, we should be here for a long time.”

The government is being urged to buy more British steel, reduce the price of energy – the biggest single cost to steel plants – and resolve Brexit delays.

The factory in Rotherham dates back to 1823, starting as an ironworks that supplied the early rail industry. It became a steel factory in the late 1880s, and has gone through numerous rounds of ownership: publicly owned British Steel from 1967, later becoming Corus, and taken over by Indian industrial giant Tata in 2006.

Liberty today is a strategic asset of national importance, according to Sarah Champion, the Labour MP for Rotherham. Aerospace companies would have to import the specialist steel it produces, leaving parts of the defence sector at the whim of global markets.

One steel job supports two in the supply chain and many more in the local economy, it is estimated, while the loss of Liberty would send shockwaves through an area already ranked in the top 1% most-deprived places in the UK before Covid-19 took an even heavier toll.

“It is not just losing the Liberty jobs that will hit the town financially, but the fact that the workers all live locally and spend locally, plus there are a number of smaller businesses who support the steel industry who will all be at risk,” Champion said.

This comes only weeks after 75 people in Rotherham were made redundant at Rolls-Royce, which is making 3,000 job losses across the UK. The aerospace and jet engine company is also an important customer of Liberty.

“There are a lot of families that rely on those steelworks. It’s a massive worry,” said Paul Wade, of the Yorkshire branch of the GMB trade union.

“Everybody who works at Liberty Steel at the moment probably transferred over from Tata, who probably transferred to Tata from Corus, right back to British Steel. So there’s a massive history with both plants. In lots of cases people’s dads also worked there, granddads even. They’ve kept families going for years and years.”

Wilson, now retired, worked at steel plants in Rotherham for 43 years. His wife, Janet, worked in admin in the steel industry, too. They find it hard to imagine the town without the factory.

“Rotherham always had a steel industry,” said Wilson. “It’s a huge part of the community and if it shuts it will be a disaster for the area.”


Robyn Vinter in Rotherham and Jasper Jolly

The GuardianTramp

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