Friday, May 20, 2011

Unfinished business

Corus Steel is taking another hit, with its owners Tata Steel announced plans to cut 1,500 jobs in Yorkshire and Teesside. This, for us, is unfinished business, but with a pusillanimous MSM and a propensity to apologise too easily, there is not going to be any critical analysis in the media.

That allows Tata to blame a continued slump in demand from the construction sector for the decision to dump its workforce, but it also claims that new climate change legislation was partially responsible for its decision.

And so pour the crocodile tears from Karl-Ulrich Köhler, chief executive of Tata Steel's European operations. "We are aware that our employees and their families will experience a very unsettling few months as a result of this announcement", he says, adding: "We will do everything we can to provide them with support and assistance."

Köhler then asserts: "The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action. Another is the regulatory outlook. EU carbon legislation threatens to impose huge additional costs on the steel industry. Besides, there remains a great deal of uncertainty about the level of further unilateral carbon cost rises that the UK government is planning."

There is certainly a case to be made for climate legislation distorting the market to the detriment of high-energy users in the UK, but you can bet that if Tata Steel is involved, there is more to this story than we are ever going to be told.