Socialist Standard April 2007 page8

When approaching the South Wales town of Port Talbot it becomes immediately obvious
that this is a community long dedicated to the production of steel. The milelong Abbey Works and surrounding buildings that contain the steel-producing equipment occupy a vast tract of land to the south of the town and form an instantly recognisable landmark, not just from the M4 motorway but for many miles along the coast in both directions.

The town’s 50,000 population cannot remember a time before the steelworks. The enormous buildings and chimneys that blight the skyline have become a familiar and accepted part of the landscape. Even the clouds of water vapour, the smoke, and the smell of sulphur that lingers over the rows of terraced houses have become an unquestioned part of daily life. But now a different – yet familiar – cloud has returned to hang over the community – the threat to the jobs of the town’s remaining 3,100 steelworkers.

Port Talbot’s association with iron and steel dates back to the early industrial revolution. Ideally sited to harness the ample waterpower of the River Afan, the town lay at the centre of the cluster ofmines that sprang up in the vicinity and utilised the port to transport the coal. Thewealthy Talbot family gave the town its new name and Christopher Rice Mansel Talbot (1803-90), a prominent landowner and Liberal Member of Parliament from 1830, opened the original iron works in 1831.
The town developed with extensive investment in the port and railways network and by 1923 the dock was annually exporting over three million tons of coal. The town’s privately owned steel works was nationalised in 1951 and again in 1967, and within a few years the British Steel Corporation (BSC) had emerged as one of the world’s largest steel producers.

But after the oil crisis of 1973 it struggled to stay competitive and the rise in energy
costs compelled many of its customers to look elsewhere for cheaper materials, such
as plastic. The 1979 recession triggered a slump in steel consumption and in a
programme known as ‘Slim-line’, 25,000 steelworkers across Wales lost their jobs,
including 5,000 from the works at Port Talbot.

Following a return to profit in 1986 the steel industry was again de-nationalised.
It struggled through the 1990s until in 1999 the privately owned BSC plc merged with the Dutch company Hoogovens to form the multi-metals Corus Group in a deal worth £4 billion. The merger was fated from the start, as the company, for all its size, was too small to successfully compete in high volume markets. Annual output had slumped from a UK figure of 55 million tonnes of steel in the 1970s to 19 million tonnes for the whole of Corus Group in 2006 and jobs had been slashed from 270,000 to less than 24,000.

Business review

Already in March 2003 Corus was in crisis as its share price sank and losses mounted. A new management was installed to initiate a three-year plan, called ‘Restoring Success’, which reduced Corus’s debt (involving a share issue and the sale of aluminium interests) and cut
UK operations from five major sites to four — Port Talbot, Teesside, Scunthorpe and Rotherham. A later business review concluded that as a high-cost steel producer whose main markets were in Europe its position was unsustainable in the long term and the future lay in lowcost production in high growth markets, which meant finding a suitable partner to merge with.