AS MANY as 120 people could be at risk of losing their jobs at a Newport steelworks.
Tata Steel says it needs to act now if it is to maintain the steel heritage at Orb Electrical Steels, Lliswerry, amid falling demand for what it makes.
It has proposed to restructure the workforce, which may lead to 83 direct jobs and up to 40 contractor roles being at risk. There are currently 400 employed at the site.
The move has been rumoured for a couple of weeks.
Stuart Wilkie, managing director of Tata-subsidiary Cogent Power, said: “This is going to be a difficult time for all concerned but the changes we are making are essential for the long-term future of the operations at Orb.
He said the firm was making the chance to “focus on improving the competitiveness of this business and steel making in Wales.”
The company is faced with reduced demand for electrical steels and a highly competitive global market place.
“That is unlikely to change in the medium term," Mr Wilkie said.
"European demand for the grain oriented electrical steels we make is still more than 20 per cent down on 2008 levels and we see high levels of imports into Europe."
Roy Rickhuss, general secretary of the Community steelworkers union, said it was disappointing news for the workforce and for the local community.
He said: “The workforce at Orb has done everything asked of it - it's a fully flexible and multi-skilled operation, so today's announcement will be a bitter blow. We will support our members through the consultation process and insist that the company avoids any compulsory redundancies.”
He added it was another example of how the economic recovery “isn't reaching the European steel industry and the UK in particular.“
The government could, he explained, provide some relief in terms of energy costs in the forthcoming budget.
The Community union represents most of the workers affected.
Jessica Morden, the Labour MP for Newport East, said: “This is really hard news for the workforce at Orb who have been very flexible as the steel industry in the UK has been going through such a challenging time.
“I will work with Community Union and, like them, hope Tata will avoid compulsory redundancies.
"We need urgent action from the UK Government in the budget to recognise the impact of high energy costs, carbon price floor and the renewables obligation which hit the steel industry in the UK harder than their competitors at a time when there is a downturn in demand for steel."
Iestyn Davies of the Federation of Small Businesses said: “The announcement of more than 120 potential job losses at the Orb Electrical Steelworks is concerning for Newport, especially amid the existing concern for the jobs of 650 workers at the Avana Bakery in the city.
“Over the past decade Newport and Monmouthshire have seen some of the lowest rises in workplace GVA within Wales. In the light of these recent announcements it is clear that more needs to be done to support the economy of the eastern-most corner of Wales so that it can sustain existing jobs and create additional employment in the years to come.”
A Welsh Government spokesperson said: “This is disappointing news, especially as the Cogent operation at Newport has made considerable efforts to drive down costs and increase market share as the steel industry in Europe continues to operate in extremely difficult market conditions
As part of Tata Steel, one of our largest anchor companies, we have a strong relationship and regular dialogue with the company. We are currently in discussion with senior management at the plant to determine how we may be able to assist with future investment in potential projects that could further help increase the efficiency and innovation of the plant.
Welsh Government officials will also liaise with the various agencies and organisations which will be able to work with affected employees to provide advice and guidance and identify alternative sources of employment.”