The steel debacle

Talk of a management buyout today at Port Talbot.
I do hope so. Better than any other plan so far.

theconversation.com/nine-ways-steel-could-build-a-greener-economy-57506

This is an interesting idea, a good way to solve the steel problem.

Jarvis reminds me of Chamberlain coming back to the UK waving a piece of paper saying we have bought time. Well good for him, we know how well that went.

Yes, indeed, anno! Especially if there is no good quality Chinese steel available, which is what it seems we are being told. But perhaps it isn't as simple as that?

I have a cousin with PPE from Oxford he always said that he wished he'd done a different degree.

"Javid’s meeting in India came as the archbishop of Wales, Barry Morgan, warned about the social and economic costs if the Port Talbot plant closes and criticised the government’s inaction.

“It raises the question of an industrial strategy for the UK, since steel is the foundation of the manufacturing base of this country and affects many other industries,” he said.

Dr Morgan, who is also bishop of the Diocese of Llandaff, which includes Port Talbot, said: “I am not an economist but it is a fact that business rates in the steel industry in the UK are much higher than in other parts of the EU and energy costs per ton of steel made in the UK are more than double those of Germany.”

“The danger is that if all steelmaking plants are closed, once they are gone, the price of steel will increase and that will have far reaching repercussions on our economy and industry.” "

This is interesting from the Archbishop of Wales. It's the economists who do not care, the ones who have a PPE and are running the country. Maybe they should take notice of the Archbishop. We do not have an industrial strategy any more.

On the One show tonight there was a feature on the ongoing construction of the new Forth Road Bridge. A question was asked about the use of British steel. The answer was that the bulk of the steel used was of Chinese origin and that no British based company had tendered for the supply. No comment was invited or made about the relative quality of British and Chinese steel. I think more questions should be asked, especially by the Scottish Government.

It fits so far in the UK there is no record of poor quality Chinese steel being used in important projects and that is what is important.

Those are interesting points, eloethan, especially about the poor quality of Chinese steel, which has been mentioned in everything I've read on this subject. So why don't those who need high quality steel (e.g. bridge builders) buy more expensive, better quality steel? It must work out cheaper in the long run. Maybe it is not good enough engineers, craftsmen if you like, making bridges? I'd expect good craftsmen and women to want best quality if only because their reputations depend on their products' perfections.

Perhaps I'm missing something, but I'd have thought that if high quality steel is needed for certain things, and high quality steel is available, then those who need it would buy it.

Something doesn't fit.

www.theguardian.com/news/2016/apr/06/panama-papers-reveal-offshore-secrets-china-red-nobility-big-business

China had a shutdown on news about the Panama papers.
Haven't read whether there are any connections to steel. Probably not, as most of it is owned by the government. However there is a list of politically sensitive people with connections to the top politicians and information is being withheld on them. Some of the people named on here have connections with power, specifically electricity.

We do not want Indian steel, either.
Who was responsible for the flyover collapsing in Kolkata last month?

Today I read that the plant was losing half of what Tata said.
What's wrong with a management buyout, which is what the management want to do?
Why can't the government put its money where its mouth is - march of the makers, who remembers Osborne saying that?

Steel production is heavily subsidised by the Chinese government and, because of these huge subsidies, manufacturers can afford to dump steel at or below the actual cost of production. Once China has a virtual monopoly on steel production and our own and other EU steel industries have got rid of their own steel production industry, perhaps China will no longer choose to subsidise the industry since we and other countries will have almost no option but to buy from China, even if the cost rises substantially.

Also, in 2013 the New York Times carried an article that was critical of the US's over-dependence on Chinese steel, referring in particular to the many safety scandals that have arisen with all sorts of products manufactured in China:

"In the case of bridges, six have collapsed in China since July 2011. The official Zinhua News Agency has acknowledged that shoddy construction and inferior building materials were contributing factors".

"When California bought Chinese steel to renovate and extend the San Francisco-Oakland Bay Bridge, problems like faulty welds by a Chinese fabricator delayed the project for months and led to huge cost overruns. These deals eroded much of the expected savings."

In 2015, ABC Australia expressed similar concerns:

".... The Australian Steel Institute and the Welding Technology Institute of Australia say some of the fabricated steel entering the country has serious quality defects" - and the article goes on to give several examples.

Why go that far for a cup of coffee

So much for Liberty then. CEO admits it is back of the envelope stuff.

Hmm. I think you're making choice of venue into something far more important than it really is. I can think of several reasons why PWC offices might be a good venue for any kind of meeting: good rooms, good coffee, good organisation...

Shrugtastic.

The government won't choose the administrator.
I think Cameron could have chosen the venue much more wisely given that PWC are into very aggresive tax avoidance and of course in line to wind up the Steel industry in Wales with regard to Tata. None of it very sensible given the situation he finds himself.

What has the government done wrong so far? I thought they were in discussion with Tata? I won't decide whether they have done a good job or not until the outcome of all the talks.

Is it that they have been pre-judged and whatever deal they come up with won't be good enough for some?

I didn't know it had been decided to wind up "the Tata operation" so surprised that PWC are "in the frame". I think that if I had to make the decision about which company to use for such a large operation I would choose one of the big four (or is it three now?) as the job would be too big for any of the smaller companies.

But I remember my mother's wise words:

"You get what you pay for"
In other words, if we buy poor quality steel we will reap the consequences in years to come. False economy.

PWC has been picked presumably because they will know what they are doing and have the expertise for the job. Perhaps the Government should pick some small unheard-of book-keeping firm instead?
I agree with thatbags Wed 06-Apr-16 17:24:15

Though the Times reports today that some of the longest serving steel workers at Tata may lose half their pension. Now that I think the government has got a duty to either prevent or else make up to the workers so thst they don't lose out that way.

If the business is losing £1 million per day it seems unsurprising that its unsustainable in the current market. I gather that the potential buyer wants to change the operation to one that recycles steel. Sounds OK to me. Not sure why there is such resistance to changes to reflect modern priorities.

I understand that the tax evasion files about Panama are a scandal. What I don't understand is what this has to do with a global steel glut of Chinese poor quality steel. Could someone show what the connection is, please, bearing in mind that it is not only Tories (not that I'm defending any who have avoided/evaded paying tax they really should pay) who have taken advantage of tax loopholes in this greedy way.

PWC has an office in Panama, too. Fortunately Cameron wasn't as crass as to go there to talk about whether he gained from his dad's financial wizardry.

Why? I'm sure you have a good reason for saying so; it's just not clear from what you've said in this thread. What has PWC and tax evasion got to do with the world steel market?

Nothing wrong at all with PWC gaining from the sale of Tata - just not very bright considering all the issues for Cameron to hold his little do there.

tizliz, I can see that would be frustrating and annoying. It does seem odd that he can't get the material he wants when it does exist.