Steel workers meet over pension crisis

The closure of ASW is a blow to Cardiff

Steel workers made redundant at the Allied Steel and Wire plant in Cardiff have begun holding urgent talks about a major shortfall in the company's pension scheme.

First Minister Rhodri Morgan joined 300 of the 800 staff for a crisis meeting on Saturday.

The Castle Works plant in Tremorfa closed on Friday after attempts by receivers KPMG to find a buyer for the site failed.

Carl Webber: Difficult future ahead

The meeting - attended by officials from the ISTC steel union - began at 0930BST at the Railway Club in Sanqhuar Street, Splott, Cardiff.

Workers have been told that the fund - which showed a £21m deficit on 31 December last year - had worsened with the continuing fall of the stock market.

The BBC's personal finance correspondent, Andrew Verity, said existing ASW pensioners would be the first in the queue to receive whatever funds existed.

The workforce are at the bottom of the ladder

Carl Webber, ASW worker

That would prove a big drain on the scheme leaving not much for the remaining workers.

"If a company goes bust and a pension scheme is not fully funded, unfortunately some workers will not get all their benefits."

Workers at the Cardiff plant will meet on Saturday to seek legal advice.

Employees such as Carl Webber, with more than 25 years of service at ASW, are anxious about the state of the pension fund.

"My basic understanding is that if there's any money left over after paying the creditors, the workforce, at the bottom of the ladder, will be paid," said Mr Webber.

The disastrous downturn on the world markets has seen more than 20% wiped off many company pensions, creating a double blow for ASW staff.

On Friday, Cardiff Council called on the Welsh Assembly to take immediate action to help those laid off.

ASW specialised in wire products

They demanded an urgent meeting with First Minister Rhodri Morgan, and an assurance that the former employees be given the same sort of support as was given to redundant Corus workers.

"There are more people living in deprived areas in Cardiff than anywhere else in the country," said Councillor Marion Drake, Cabinet member for enterprise.

She said the Council was working with others to do what they could to help the situation but it was the assembly which had the power to make a real difference.

Many employees failed to turn up for work at theTremorfa plant since receivers KPMG revealed earlier this week that the site was closing.

There is still a chance a buyer for the ASW works could be found and workers re-employed, but KPMG took the decision to close the plant ahead of the annual August shutdown.

The Welsh Assembly said it was powerless under EU competition rules to step in and help save ASW.

ASW Chief Executive Graham Mackenzie

More than 100 workers at the Castle Nails plant - which is on the same site - will keep their jobs, following interest from other firms.

ASW has blamed harsh trading conditions for its downturn, with the influx of cheap European imports and increasing costs of raw materials.

KPMG said the firm's history of trading at a loss meant it could not allow ASW to continue trading.

ISTC general secretary Michael Leahy said it was "devastating news" for workers.

ASW went into receivership on 10 July. The firm's share price had dropped to just 2.5p after riding high at more than 100 times as much at its peak.