Is Steel Worth Saving? Panorama

British-made steel.

It's everywhere.

The coins in your pocket.

The tins of baked beans in your kitchen.

Your washing machines.

The car in your garage.

Railway lines.

Do we care that it's all British-made?

And if we do,

do we care enough to use our taxes

to save the industry from going under?

To some, Port Talbot is famous for its acting sons -

Anthony Hopkins, Michael Sheen, Richard Burton -

they all come from around here.

But now, this Welsh town is itself taking centre stage,

a reluctant actor in what feels like the final scene

of Britain's industrial age.

That's Port Talbot Steelworks down there.

They've been making steel there for more than a century.

The whole town is built around it.

But as everybody must surely know by now,

the future of the steelworks is looking uncertain.

March 29th 2016 is not a date anyone here will forget.

'The top news story -

'the steel giant Tata announces plans

'to sell its British businesses.'

'The company employs 15,000 workers.

'Ministers are under pressure to intervene.'

'Most of the jobs would go from the Port Talbot plant in South Wales.'

Surprisingly few people in Port Talbot

blame Tata Steel for selling up.

The company, based in India,

said it was losing around £1 million a day

propping up its many British works -

Shotton, Trostre, Llanwern, Orb, Caerphilly, Corby,

Hartlepool, Rotherham, Stocksbridge, Wednesfield, Warwick.

-Ah!

-Here we go.

-Thank you very much indeed.

'But Port Talbot stands to lose by far the most.'

Thousands of jobs.

And the Government has been blowing hot and cold.

Would they save the works?

Would they let it go under?

Maybe a foreign company would ride into town?

It's been a frightening month.

And it's not just the steelworks -

it's every business, even this little cafe

that does enormous breakfasts for hungry steelworkers.

Very worried at the moment.

Nobody's knowing what's going on.

Just waiting.

It's like, er...

being on the end of the cliff, isn't it?

Your customers, most of them, are steelworkers?

-60%.

-Is it 60%, really?

-Yeah.

-Yeah.

-Mmm.

-Easily 60%.

So you'd be...

bust if...?

Oh, yeah. Definitely.

If you've got a steelworks in your town,

and you look at it every day,

and you pass it every day, it's part of your life, isn't it?

It is, yes.

There is a great family value to it.

To take that away, it'd be ripping the heart out of this place.

But it is not just "can it survive?"

And in Port Talbot they won't like this question,

but should it?

In other words, close down the blast furnaces?

-Absolutely.

-Close down the blast furnaces?

But that's the heart of this place.

Unthinkable to most locals, but this is not just a local issue,

which is why we brought some outside experts in

to argue the colder, economic case about the future of British steel.

What about our national security?

Steel is an important...

-Steel is...

-CROSSTALK

-If you've...

-CROSSTALK

Who wants steel to be expensive, other than the producers?

How many of you have actually been inside a steelworks?

All this against the backdrop of a global steel crisis

which has seen the industry's fortunes fall over the years.

It's also a fundamental foundation industry in the UK,

which we all, every single one of us, touch daily.

And do we want to give that away?

I'll tell you what would make it work - the pride in what they do.

And they've been determined all the way through it.

APPLAUSE

Forget about the great global steel crisis for a moment.

Here, it's local.

It's personal.

15,000 jobs are at stake in this area.

Steel goes deep here.

Steel.

For over 100 years...

It's been the heart of our lives.

It's given us jobs.

Skilled jobs.

It's given us homes.

It's put food on the table.

It's who we are.

This video is how the people of the town put their case

to the owners in India when they held the board meeting last month

which would decide the steelworks' future.

I'm asking...

And I'm asking...

And I'm asking...

-BOTH:

-And we're asking...

-ALL:

-We're all asking...

To secure our jobs...

Our communities...

And our futures.

And the works' managers made their own appeal.

They put forward a survival plan to the Tata board -

a plan to make steel more efficiently, codenamed The Bridge.

Save our industry.

Save our steel.

Save our steel.

-BOTH:

-Achub ein dur!

Save our steel.

Save our steel!

That plan was unanimously rejected.

Tata said it was too pricey, too risky,

and they wanted a quick sale.

As that news broke, the Business Secretary, Sajid Javid,

was in Australia, blissfully unaware it was coming.

That didn't make him many friends in Wales.

48 hours later he was in Port Talbot, trying to make amends.

And behind the scenes, plans were already being laid

to resurrect the management proposal.

We will do everything we can.

There's a lot of tools in the box - we will do everything we can

to help continue steel-making in Port Talbot.

These are tough times for the steel industry.

Demand has crashed worldwide over the past few years,

and with it, the price of steel.

China gets the blame for producing too much,

and then off-loading it on the rest of the world

for less than it costs them to make it.

It's called dumping.

The steel sector in the UK isn't inherently inefficient.

It's because we are...

snowed under,

drowning under a tsunami of Chinese imports.

We're seeing China dumping steel at a huge rate onto the global markets.

Tata, which has had £2 billion wiped off the value

of its British steel business over the last five years,

don't just blame that for their woes.

They say it costs too much in this country to make the stuff,

for a whole variety of reasons.

We have business rates here

which are perhaps ten times as high as they are in Germany or France,

for the equivalent work.

All the other countries have got low energy costs and everything.

And I'm sure on the same playing field,

we could compete against anybody in the world.

We've been telling successive governments

that the costs they are plying on to us, adding to our costs,

are harming us.

And it's taken ten, 15 years for government to realise

that when we were saying this was going to harm us,

we weren't crying wolf, and it really is now coming home to roost.

It's the Business Secretary's job

to promote economic growth in this country.

So what is the Government doing about helping out

with things like business rates and energy costs?

These are all the kind of areas

where we've taken action over a number of months.

In fact, energy action was taking place three years ago.

And it's now starting to show an impact and have an effect.

The energy offering is already much, much more competitive than before.

Business rates - that's another one.

What you're highlighting are all different areas

where, one way or another, we have already taken action.

If they don't stand by the steel sector now,

then I think this could be the beginning of the end

of steel-making in the UK.

Off we go.

Nice and slow now.

Wait for us, Ems!

Steelworkers like Neil Woodcock

will have most to lose if the worst happens.

Like his father, his grandfather, his great-grandfather before him,

his life has been forged by the steel industry.

'Steel, to us as a family, has not only been'

a source of great income,

but a source of great pride and achievement.

It's something that I could say my family could not have been

where it is today, and what they are today, without it.

But how many families in Britain today could expect to pass

their way of life down to yet another generation?

As it happens, Neil isn't that keen

on his children going into steel like he did.

But it's what happens now to him, and his family,

that keep him up at night.

As a father, you work to provide for your family.

And...

If Port Talbot goes, I...

I dread to think where the money's going to come from.

Well done, Emlyn!

We're just really worried that it...

That this is the end, that this is just not going to carry on.

We're really going to be struggling as a family if he does lose his job.

That's an example for everything...

Kurtis Davies is 16. He wants to be an apprentice.

He went for an interview at Port Talbot works a fortnight ago.

It's scary now, thinking, you know, in two, three years,

the whole place could be gone.

I'll have to go outside of Port Talbot if it does get closed down.

You know, it's going to be the case of leaving family, friends...

I'm just going to have to go on my own back.

So you'll look for an apprenticeship elsewhere, then, if it happens?

It's the only other option.

Why should that young man have to move from this area? Why?

Where's he going to go?

I've got this picture in my mind of that young lad

going to Nigeria to do his apprenticeship.

You're going to have to get up very early in the morning for that!

LAUGHTER

But you'll have weekends off.

So I think...

I think what you're saying is

-you can't imagine a Port Talbot without steel either.

-Definitely.

-None of you can?

-No.

With the clock ticking on Tata's sale deadline,

Port Talbot steelworkers could have been forgiven

for wondering whether their future had already been given to this man.

Sanjeev Gupta, the boss of Liberty House,

was telling anybody who'd listen

that he was interested in buying the plant.

It's daunting for me to consider doing this.

But can we do it? We can.

I've never lost money in my life.

My company has made profits every single year for 25 years.

My job every day is to manage risk.

I have to take risks - you can't do business without taking risks.

But my job is to measure it,

to take a measured risk, calculate it and to manage it.

BAGPIPE MUSIC

A fortnight ago, he took control of two mothballed Tata Steel mills

in Scotland, and talked up his role

as the saviour of steel-making in Britain.

APPLAUSE

We hope what we start here today will be the beginning of a new era

for Scottish steel, and maybe for British steel as a whole.

Thank you.

APPLAUSE

Even if that's true, it would be a new era,

which wouldn't actually include making steel from scratch,

which is what Port Talbot's blast furnaces do.

Liberty's business model is all about recycling steel from scrap,

using electric powered arc furnaces.

In terms of a new model,

the main thing is to start melting scrap, start recycling scrap.

Rather than making steel, we recycle steel.

You know, there is enough steel scrap available in the UK

to feed all our requirements of steel.

The really big customers, like the car-makers,

prefer virgin steel, made from iron ore in blast furnaces,

to recycled steel.

And there's also a worry about the number of men that he would employ.

Mr Gupta says no problem - you just retrain them.

We've done... Our initial studies showed the number of workers

are more or less correct in terms of our plans and what we'd want to do.

So would he promise to protect all those 4,000 Port Talbot jobs

if he were to take over the works?

Yes, absolutely.

Stephen Kinnock is the local Labour MP,

and he's pretty sceptical about the whole proposal.

My understanding is that

we would be reducing from about four million tonnes a year of production

to one million, and it is difficult to see how you can do that

without a pretty devastating number of job losses.

Mr Kinnock knew nearly three weeks ago

that the management buyout was being put together, and he was backing it.

I know the conversations are taking place.

I think it's a very attractive idea with some great potential,

but, of course, the team around it need time to flesh out the details,

and also to get the investment that they need to back the plan.

The steel industry has been up and down since World War II.

Mostly down.

'The Government intends to bring iron and steel

'under public ownership.'

Nationalised by Labour in 1951...

We shall immediately repeal the act of nationalising steel.

..reprivatised by the Conservatives in 1953,

nationalised again by Labour in '67.

And then in 1988, with the Conservatives again in power...

BBC NEWS JINGLE

'British steel is to be privatised

'after turning in impressive profits.'

But the good times didn't last,

and the steel industry stumbled into the 21st century.

And now nationalisation - is it back on the agenda?

Four days ago, with the pressure really mounting,

the Government did say it is willing to take a 25% stake

in any credible rescue package.

That's hundreds of millions of pounds.

Isn't that just part-nationalisation by the back door?

No, says the Business Secretary.

The Government will be investing on a commercial basis.

If you look at some of our fastest-growing industries today -

aerospace, the automobile industry - they rely on other industries,

and steel is an important part of that.

If you look at our infrastructure plans,

£300 billion of infrastructure spending planned over five years.

A lot of that will rely on British steel.

I believe firmly that steel has a huge future in Britain.

But steel production makes up just 1%

of Britain's manufacturing output.

And just 0.1% of the country's economic output.

That's only a little more than the fishing industry.

If we contrast it to something like financial services, for example,

that constitutes about 12.5% of the UK's economic output.

In terms of its relevance to the much wider manufacturing sector,

it's not as important as people realise.

When the plant is at full production

-it produces a radiator every five seconds.

-Wow.

'Tony Mullins is the boss of a radiator company just down

'the road from Port Talbot.'

Port Talbot is 37 miles from us.

Transport costs and logistics are very efficient

and the service is excellent.

His company, QRL Radiators, has used Port Talbot steel

for a decade, and he's very happy with the service

and quality of the product.

He wants that to continue.

Indeed, he feels strongly about it,

but his company COULD live without it.

If Port Talbot were to close tomorrow, let's be realistic,

next month, a month after, what would happen to you,

how would you manage?

We would have to source our steel overseas.

No other UK manufacturer could do it?

No.

And, as such, we would regret it greatly.

And the effect of that on your business would be what?

Clearly we will cope, because, as you are aware, John,

there is no shortage of steel in this world at this time.

We have people queuing up to sell us steel.

And that strikes at the heart of keeping Port Talbot open,

and indeed at the argument for keeping British steel.

If Tony Mullins can easily get steel from elsewhere,

can our steel industry really make the case

that it is economically crucial?

And does it really make sense for the Government to spend vast sums

propping the industry up?

What is so special about British steel? Is there anything special

about British steel that says we absolutely must keep

this industry alive?

No, not in that sense.

You should keep it alive because it makes economic sense to do so,

because within this industry there's profitability.

Mark, you're not impressed with the idea of Government money

bailing out this steelworks.

I think the Government should be putting in policy frameworks,

not direct market interventions on sort of playing the stock market

on a gamble of whether or not steel prices are going to go up or down

or a particular business plan might work.

I'm sure, in the end, there will be payback for the Government

but it is giving all steelworks in Britain the chance.

We made money years ago and we can make money now.

If there IS to be a turnaround, it needs to be private sector money,

and it needs to be a business proposition,

not a political proposition from the Government.

And if that means the company going bust or the steelworks closing...?

-Yep.

-So be it?

-So be it. Ultimately so.

'But that is clearly not the Government's view.'

It's a bit unusual for me to agree with any Conservative,

but anyway, you take what's on offer.

And what sort of figures do you have in mind?

Are you talking about millions, tens of millions,

hundreds of millions or billions?

One of the figures I've heard quoted is £2 billion over ten years,

which is not a great deal of money for anybody that wants to invest.

I'm saying not a great deal of money,

for people that are big business.

I was going to say some taxpayers might regard that

as a great deal of money.

Yeah. You're right, spot on, but for a lot of people

it represents a very good opportunity.

It's an opportunity, and it is not one to be missed.

And it's not one to be rejected.

True, but it's just part of the solution.

Somebody has to have a realistic plan for buying the steelworks,

or the Government share has got nowhere to go.

And that plan, which the steelworkers obviously hope

is realistic, re-emerged as if by magic

at the same time that the Government made its offer.

That plan - the management buyout.

I've felt since the beginning, really, that a management buyout

would be the best option, because you would have a team

in place that really knows the business,

and you would have a set of buyers behind them that is giving them

the fire power to deliver on the turnaround plan.

Hang on a minute, that's the SAME turnaround plan,

the so-called Bridge that was thrown out by the Tata board

back in March as too pricey - and, yes, too risky.

Ah, but then the Bridge didn't have those Government millions behind it.

Or a consortium backed by one of Wales's richest men,

the billionaire Sir Terry Matthews

AND headed by the investment guru, Roger Maggs.

I think the management buyout plan is totally viable.

It will be raising money from the management,

from hopefully the employees, and probably other people's money

as well, other investors, sufficient to finance the Bridge,

the plan developed, to get the company back to break even.

Roger Maggs also recently landed a job charged with driving

future business diversity in Port Talbot

to make it less dependent on steel.

But diversifying, for now, can wait.

Dragging the past into the future is more important.

The number-one priority is to keep the boat afloat.

I hope that there will be, once the dust has settled, efforts made

to make this not just a steel-making region but the best.

Not in Britain but in the world.

But perhaps we shouldn't get TOO carried away.

After all, the problems of yesterday are still there today.

This is an operation that is shedding

£1 million a day, ultimately.

And so there would have to be a massive turnaround to really make it

into a profit-making rather than a loss-making business,

so there is a strong potential that it may not be around in five years.

In the case of the management buyout, you hear ideas

about financial restructuring but there is very little detail

about, operationally, what is going to improve.

'It may lack detail, but the unions say that the management buyout

'is what ultimately convinced the Government to get involved.'

The plan is there, the plan can turn it around.

And I'm sure the more people that come to see the plan

will buy into it and agree with it. The Government have bought into it,

which I didn't think we'd have a hope in hell of doing,

but showing them around and getting them involved and getting them

to buy in and see what it is seems to have worked.

And that's a credit to the workforce here.

Are you supporting a management buyout?

I want to see as many potential buyers as possible,

and certainly the management team would be an attractive one.

It's not all gloom and doom.

Sit down, please.

Growing up in the shadow of the steelworks today means facing

uncertainties that might have surprised people

like Richard Burton, Anthony Hopkins and Michael Sheen.

OK, we're going to do When I Grow Up from Matilda.

Who knows this one?

Michael Sheen father's, Meyrick,

chairs the local amateur operatic society.

Its youth theatre rehearses every week.

# I will be smart enough... #

'Nine-year-old Neve McQuaide, herself the daughter

'of a steelworker and, who knows,

'perhaps Port Talbot's next Oscar-winner.

'She certainly knows how to attract attention.'

Let's see that bit.

'She showed me the poster she'd made

'campaigning against closing the works.

'It went viral on the internet.'

"I am scared that if the steelworks close, this town will be

"worse than it is now,

"and we need to make sure

"that people have other jobs to go to."

# When they hear oom-pah-pah! #

Other jobs to go to?

Who wouldn't want that?

But the next generation relying on the same old industry -

that's a different proposition.

Right, final thought, final question.

Can any of you imagine a Port Talbot without steel?

-ALL:

-No.

-Definitely no.

-None of you can?

-No.

-You asked what was special about it.

And it's pride and passion. That is why I do it.

I'm a fourth-generation steelworker myself.

And if we let this go under,

our forefathers now will never, ever forgive us.

Never.

APPLAUSE

There's just five weeks left for any other buyers out there

to get their bids in for Tata's British steel business.

They'll be looking for more than pride and passion

from their workforce.

They'll be looking at the balance sheet.

Whether there really is anything special about British steel

depends on the bottom line.