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Monday, 6 December, 1999, 11:04 GMT
Steel: strength endures
Welsh steel mill Steel mills have been part of the industrial landscape


The British steel industry has survived a century of contraction to remain one of the most productive in Europe, as BBC Business Correspondent Sarah Dickins reports from its Welsh heartland.

Steel has been produced in the UK for centuries.

A Century of British Industry
Part of the Cistercian abbey where monks used to make iron ore can still be found at the British Steel works at Port Talbot in Wales.


It was very dirty and very dangerous
Former steelworker Tommy Fellows
In fact, that tradition of small communities producing steel was prevalent at the turn of the 20th century.

Some were said only to employ Baptists, others only Catholics. But each specialised in its own market.

Giant consolidation

That was how steel production continued until the second half of the century, when it gave way to consolidation and the giant steelworks which dominated their communities.

In 1945, there were 50 steelworks in Ebbw Vale in South Wales. By 1970, there were just seven.

steel furnace Steel making uses few workers now
The process of making steel also changed little until recent years, and was hard, hot work. Tommy Fellows, now president of the Iron and Steel Trades Confederation, recalls the open hearths he started work on 45 years ago.

"It was very dirty and very dangerous. You had to keep your wits about you all the time. We used to say we didn't know if we were going home. It was a far different process than what is used now because we were closer to the steel."

Higher productivity drive

Production methods have changed radically since then, and so has the industry itself.

It was nationalised in 1951 and again in 1967.

The drive was to supply the new industries making products such as washing machines and cars.

By 1972, the British Steel Corporation (BSC) was one of the world's biggest producers, but it struggled to stay competitive.

steel making The UK has some of the most productive mills in Europe
The oil crisis of 1973 compounded its problems. The rise in energy prices meant customers wanted materials that were cheaper and used less energy, such as plastic. Steel consumption fell, and the recession of 1979 dealt the sector another blow.

Huge job cuts

Within a year, BSC had brought in huge cuts, in a programme known as Slimline. The Port Talbot works, which had employed 12,500, saw its workforce fall to 7,500. In Wales alone, 25,000 steelworkers lost their jobs, a pattern that was repeated across the UK.

But the strategy paid off. BSC, which had been losing up to 4m a day, was making profits of 100m a year by 1986. The industry was privatised.

Port Talbot's works convenor, Ken Williams, believes the tough decisions were needed

"I think that is one of our great triumphs, because in our willingness to move with the times and our willingness to reduce those numbers, that enabled the works to survive," he said.

The job losses continued, but investment increased. Port Talbot has just spent 120m on new plant to make steel that is more versatile for customers to use. The works is now the most efficient in Europe.

New role for workers

Ken Williams has also sees big differences in the role of the employees.

"Steelworkers have to be aware of what the customer's needs and, very aware of the equipment they are using. It often surprises us as a trade union just how much our members need to know simply to make steel these days," he says.

And the changes within British steelmaking are shown in the modern plants which are virtually run by computer.

Productivity has increased from just over 100 tonnes per employee 20 years ago to more than 500 tonnes today.

Globalisation

Like other sectors, steel is becoming more globalised, as reflected in the recent 4bn merger between British Steel and the Dutch company Hoogovens, to create the multi-metals company Corus.

UK steel producers have been hit recently by the strength of sterling, which has reduced export revenues.

And like the rest of the global industry, they have suffered from falling demand in key markets such as South East Asia, Russia and South America. Crude steel production in the UK in 1998 was down by six per cent.

But although economic circumstances have affected investment plans, the UK industry is determined to maintain its competitiveness. It now employs just over 30,000 people, compared with 150,000 in 1979, with another 30,000 are estimated to work in steel processing.

However, those workers are as productive as their counterparts in the US and Japan, figures which give the industry confidence for the next millennium.
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