British Steel on the verge of collapse

Discussion in 'UK politics, current affairs and news' started by steeplejack, May 21, 2019.

  1. steeplejack

    steeplejack Reluctant Hardliner

    Many reports this morning that British Steel, a zombie brand revived by owners Greybull capital, is on the verge of collapse. 5,000 jobs at risk in the company's HQ in Scunthorpe, up to 25,000 in the wider supply chain, in what would be an absolute disaster for the whole area.

    The government is being asked for a loan to keep the company going, so that it can buy EU Carbon credits which it didn't expect to have to pay for. Of course Brexit is playing heavily, in the whole narrative, but fingers have to be pointed at Greybull as well who have a dismal record in the previous companies they have "taken over" (four out of five have since gone bust IIRC); mysteriously large management and facilitation fees are being charged to British Steel by Greybull.

    Distressing to see more scenes from the late 80s / early 90s playbook playing out in one of the last heavy industries the UK has capacity in. I suspect the government will wring their hands but do nothing, and let it go. Without a deal by tomorrow it's game over...
    Nigel, muscovyduck, A380 and 4 others like this.
  2. Poi E

    Poi E Well-Known Member

    Commiserations to the workers for the uncertainty they face.

    It'll boost the Brexit Party vote in Scunthorpe.
    Nigel likes this.
  3. Drarok

    Drarok Well-Known Member

    Eh?! Surely Brexit is causing more trouble for British Steel? Why would people flock towards certain doom?

    Badgers likes this.
  4. Poi E

    Poi E Well-Known Member

    Brexit is not just about money.
    Nigel likes this.
  5. steeplejack

    steeplejack Reluctant Hardliner

    Scunthorpe voted 66% in favour of Brexit in 2016. Would expect significant support for Farage there on Thursday; it will be easy for him to spin this in his favour as a mixture of establishment failure / indifference, plus EU environmental red tape strangling British business.

    Both lines are bollocks of course but Farage has never been terribly bothered about speaking bollocks and hoovering up votes on the back of it.
  6. quimcunx

    quimcunx protestant traybake

    That's a weird statistic for them to roll out. That could be 55% Turkey, 10% NA and 5% EU. I mean it probably isn't but why not put in the specific % for exports to EU?
    Nigel and Bahnhof Strasse like this.
  7. brogdale

    brogdale Coming to terms with late onset Anarchism

    To voters....
    William of Walworth and Poi E like this.
  8. The39thStep

    The39thStep Well-Known Member

    We could of course just nationalise it with no compensation. Oh hang about we cant , its against EU regulations
    Nigel, sptme, keybored and 5 others like this.
  9. cupid_stunt

    cupid_stunt Dyslexic King Cnut ... the Great.

    I don't get it, the government loaned them £100m just last month, surely the company knew that wasn't enough at the time?

    Then they came back asking for another £75m, told to fuck off, so dropped it to £30m, the company seems all over the fucking place, best just to nationalise it, and fuck them over.

    You posted that as I was typing basically the same. :mad: :D
    Nigel and The39thStep like this.
  10. Dogsauce

    Dogsauce Lord of the Dance Settee

    Wasn’t there some prominent Brexiter who said the loss of Britain’s remnant manufacturing industry was a price worth paying? Although not as if it was doing well anyway...

    If I was those led by donkeys lot I’d be slapping posters up with that quote on all around Scunthorpe.
    Sprocket. and Pickman's model like this.
  11. steeplejack

    steeplejack Reluctant Hardliner

    Yes, the living ghost of "Professor" Patrick Minford, Thatcherite economic guru, has been rattling his chains a lot lately. The line about manufacturing being his choicest one.
  12. Smokeandsteam

    Smokeandsteam Well-Known Member

    It’s an odd line. A better one would be to publish data from the EU Coal and Steel Community group which regulated industrial activity for years and oversaw literally thousands of job cuts in steel and coal.

    The idea that what is called ‘British steel’ now is exporting its product to EU countries at decisive levels is very misleading
    Sprocket. likes this.
  13. Sprocket.

    Sprocket. I am just waiting for the next tomato..

    It’s been in decline since the days of Sir Monty. When they started letting newly qualified craftsmen go as they finished their apprenticeships it was a bad sign back in 79.
    I know lads I did my apprenticeship with have left and gone back several times. I know three currently at Scunthorpe, or Appleby as we still call it. Waiting for the hammer to fall again and probably for the last time.
    I left it at twenty one. Couldn’t stand the unreliability of it.
  14. Poi E

    Poi E Well-Known Member

    And therein lies the only truth to the charade.
  15. Sprocket.

    Sprocket. I am just waiting for the next tomato..

    And making steel with zero carbon emissions is very costly.
    Jobs and communities have never been the Tories first concern.
    Nigel and Pickman's model like this.
  16. steeplejack

    steeplejack Reluctant Hardliner

    workers' wages due on Friday, have apparently been paid early, today.

  17. skyscraper101

    skyscraper101 0891 50 50 50

    British Steel to enter insolvency
  18. steeplejack

    steeplejack Reluctant Hardliner

    Nationalisation the only option, and the only option a far right Tory government won't contemplate.

    If it was a bank, our taxes would have bailed it out already.
  19. Smokeandsteam

    Smokeandsteam Well-Known Member

    The problem of course is that EU state aid rules prevent nationalisation and investment.

    Given that it’s biggest customer by far - Network rail - allows it to plan and forecast demand effectively more works needs to be done to uncover what’s happened here, how much money Greybull has taken out of the company and exactly which orders, and worth how much, have gone due to Brexit
  20. pseudonarcissus

    pseudonarcissus fluttering and dancing

    WTO as well. Unfortunately there are some industries that are just not viable in the period between a “clean” WTO Brexit and negotiating country by country deals. Agriculture, textiles and cars are others. Nationalisation is a quaint idea but you still need customers. Ban imports of rails and the world will ban export of Scotch whisky, or whatever Britain’s biggest export is.

    Steel mills publish rolling schedules years in advance. It’s a long lead item. Anyone would be crazy to order UK steel for 2020 delivery

    Unfortunately this is what people voted for when they voted for Brexit.

    I hope there are lots of jobs going at weatherspoons and that Farage and Johnson will figure something out.
    A380 likes this.
  21. Smokeandsteam

    Smokeandsteam Well-Known Member

    The argument about Bexit is a nonsense.

    Firstly, the vast majority of BS orders were for the domestic market and not the EU. network rail placed an order worth 1/4 Billion late last year. Over 60% of steel used here is made elsewhere and so this could be increased, possibly even without breaking state aid rules, if government mandated it. The idea, spun by Greybull, that the collapse was due to a drying up of orders from EU countries is basically a lie.

    Second, an inquiry has just been announced into the collapse. Questions that immediately spring to mind are a) does the recent investment of Greybull in the French steel industry have any impact on their decisions regarding British Steel b) given their request for a further loan from Government has been revealed as ‘illegal’ exactly what did they want the money for? c) how much has Greybull invested in the plants and how much money has it take out as it’s ‘administration fee’ and d) to what extent has Greybull been influenced by the EU monopoly plan for steel. Talking of which

    3. The proposed TATA /Thyssenkrupp merger isn't just a capital merger it's a political one. Thyssenkrupp is represented on the European Round Table and one of the corporate architects of the Single Market. This is how the EU intends to fight for market share globally against US/Chinese steel production. As we know monopoly does not care about towns like Scunthorpe or the importance of basic industries to the economic health of national economies. Those seeking an EU angle on this issue might want to start their enquiries there rather than this mystical drying up of orders from the EU
    Last edited: May 22, 2019
  22. pseudonarcissus

    pseudonarcissus fluttering and dancing

    1) Unfortunately switching to specialty steels is not that easy. I'm not sure Network Rail could keep a steel mill going full time
    2) 3) and 4) are all clearly Brexit related, the UK without an indutrial policy, and not protected by the EU will suffer.

    The 120MM loan was Brexit related in thet carbon credits can't be worked out as the UK will be outside the EU scheme

    I can't find statistics on steel exports for Scunthorpe so I will shut up.

    Brexit would have needed a lot more thought and planning to make it pain-free for many British industries, irrespective of if you you think it was a good idea or not.

    It's just such a terrible shame. Bloody Tories.
    Last edited: May 22, 2019
  23. alex_

    alex_ Well-Known Member

    Yes, because if it was a bank all of the depositors would take a bath and x million people wouldn’t be able to buy their shopping at the weekend.

  24. alex_

    alex_ Well-Known Member

    This is so confused - it’s a bankrupt business it’s worth nothing - who would you compensate for what ?

    Then you talk about the eu banning nationalisation, which the French manage with national security exceptions.

    Or are you talking about something else ?

  25. Smokeandsteam

    Smokeandsteam Well-Known Member

    You’ve taken my arguments - that prove that the decision was not related to Brexit, and that if EU membership has played a role in its closure it’s a wholly destructive one - to argue that the closure is related to Brexit.

    Closures are, at root, always about political and economic choices and not necessities. There is growing evidence that what drove this decision was classic asset stripping by a private investment company that cashed its chips in when the government turned off the loan tap. There is also evidence that the monopoly steel strategy of the EU single market project played a role in the background as capital seeks to jump on board.

    Greybull claim that however the closure was motivated by a drying up of orders due to Brexit.

    That you’ve adopted the latter explanation - despite the overwhelming evidence that this isn’t the case - is unfortunate.
  26. Smokeandsteam

    Smokeandsteam Well-Known Member

    Firstly British Steel is not bankrupt. Read the report published today.

    Second, the discussion is about state aid rules - not nationalisation. These are not banned by the EU but work in a manner that prevents government from stepping in to save plants from capital flight.
    Last edited: May 22, 2019
  27. 8ball

    8ball Hetero Sapiens

    If it wasn’t for that dastardly EU, eh?
    Badgers likes this.
  28. Smokeandsteam

    Smokeandsteam Well-Known Member

    For the 4th time this decision needs to be seen for what it is - capital flight and asset stripping - the EU’s monopoly strategy has been unhelpful. Greybull’s spin that the decision is ‘Brexit related’ is a lie
    Nigel, Radiatori and Badgers like this.
  29. Badgers

    Badgers Mr Big Shrimp!

    Strong and stable :thumbs:
  30. 8ball

    8ball Hetero Sapiens

    Four times!

    I salute your indefatigabitity. :thumbs:

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