In steeltowns your chances of getting a job (and keeping one) are inextricably entwined with the fortunes of local industry. This message was painfully brought home to the residents of Port Talbot this week where job cuts, numbering in the hundreds, have been announced at the steelworks by the owners, Tata Steel. Heavy industries have been the main source of work in Port Talbot for two hundred years but since the Second World War the state of the local labour market has been largely determined by a single workplace, the steelworks. What follows is a brief account of how the plant has shaped the local labour market and employment trends in Port Talbot, placing the present day crisis within an historical context.
The ‘Boom’ Years, 1945-61
Steel has been a significant employer in Port Talbot since the construction of the original Port Talbot steelworks in the first decade of the twentieth century. However, it was not until the arrival of the Abbey Works, after the Second World War, that the industry’s hegemonic control of the local labour market was fully realised. In 1945, the Port Talbot and Margam steelworks, owned by Guest Keen and Baldwins, employed fewer than 5,000 workers. With the construction of the new Abbey Works and the formation of the Steel Company of Wales, the demands of the local steel industry grew exponentially so that by 1961 the works employed over 18,000 workers. If contractors were included, the figure rose to over 20,000.
In contrast to the depression of the 1920s and 1930s, unemployment was largely eliminated in Port Talbot during the immediate post-war period. The senior managers of the Steel Company of Wales frequently complained of being unable to recruit workers in sufficient numbers and bemoaned the local shortage of labour. It was said in the 1950s that it was impossible to get a painter in Port Talbot because they had all gone to work in the steelworks; even local bakeries reported facing a staff ‘exodus’ as their employees accepted more attractive jobs at the steel plant! To combat the acute shortage of labour the Steel Company of Wales was forced to offer generous wages to its employees as well as a comprehensive range of leisure and welfare facilities. Some local residents still feared that the development of the Abbey Works posed risks, with the town ‘putting all its eggs in one basket’. For most, however, this was a halcyon era. Demand for steel was high and jobs were plentiful.
Years of Adjustment, 1961-79
The plant’s workforce peaked in 1961 with over 20,000 employees; it was the largest workplace in Wales. But some alleged that this vast army of workers was the product of wasteful ‘overmanning’ practices or ‘jobs for the boys’, as one steelworker put it. As the Steel Company of Wales faced a more competitive international market in the 1960s, the firm was keen to make labour savings in the interests of increased efficiency and productivity. In particular, managers blamed the plant’s trade unions for making exorbitant labour demands and insisting on the right to determine manning levels for particular jobs and machinery, many of which were deemed excessive. Overmanning, however, was also a product of managerial failings: a lack of clear foresight, flawed recruitment strategies and a tendency to hire more workers than was strictly necessary during periods of increased demand. The introduction of new technologies in the industry also made many work processes less labour intensive.
The result was a decrease in employment at the plant, in the region of 6,000 workers during the 1960s and 1970s. Hard redundancies were mostly avoided, however, with cuts being made through a gradual combination of early retirements and ‘natural wastage’. Nonetheless, it was made clear to local politicians and residents that the steel industry would no longer be able to meet the employment needs of the locality alone. Attempts to diversify the local economy produced some successes, such as the completion of the BP petrochemical plant at Baglan Bay and the regeneration of the Afan Valley, but, on the whole, these ventures failed to produce the number of jobs that the steel industry had once provided.
Crisis and Slimline, 1980-88
1980 was a watershed year for the steel industry and Port Talbot. The stringent fiscal policies introduced by the newly elected Conservative government forced the British Steel Corporation to drastically reduce its expenditure. Job cuts were an inevitable consequence of the government’s plan to return the loss making nationalised firm to profitability. Several formulas were tabled to bring about the reduction in employment levels necessary in south Wales. The first of which envisaged closing either the Port Talbot works or the Llanwern works, in Newport, entirely: a nightmare scenario for either community. The second, known as the ‘dogleg’ solution, proposed preserving Port Talbot’s blastfurnaces and steelmaking plant but closing its rolling and finishing operations. As part of this formula, steel made in Port Talbot would then be rolled in Llanwern, which would be exclusively devoted to finishing activities. The proposal which was eventually adopted, however, was the ‘slimline’ solution. Under ‘slimline’, both Port Talbot and Llanwern would keep their steelmaking and finishing plants but their output and workforces would be effectively halved. For Port Talbot, this meant a loss of around 6,000 jobs. It is little surprise, then, that the national steelworkers’ pay strike of 1980 escalated in south Wales into a dispute over survival and jobs.
The 1980 steel strike was successful in extracting a national wage increase for steelworkers but this mattered little to the 6,000 workers who lost their jobs at Port Talbot. For the workers, their families and the community, the implementation of the ‘slimline’ formula was a disaster. Its effects were clearly felt in Port Talbot itself: supermarkets, cinemas and nightclubs all closed during the 1980s. Thirty years earlier, the Port Talbot steelworks had been nicknamed ‘Treasure Island’, owing to the large salaries and plentiful work it offered its employees, now the town achieved a degree of notoriety as ‘Gyro City’.
Local politicians and trade unionists often portrayed the cuts in the steel industry as apocalyptic; ‘Wales at the Abyss’ was the title of one report produced by the Wales Trade Union Congress in response to the crisis in steel and frequent allusions were made to a return to the 1930s. In reality, local unemployment did not regress to the worst levels of the inter-war period. Often, this was because many redundant steelworkers found themselves back working in the plant but in the guise of contractors employed by private agencies. Typically, however, contract work was less well paid and more insecure than the employment available through the steel company. Sociologist Ralph Fevre called it, ‘the quiet privatisation of British steel’.
Privatisation and Globalisation, 1988-Present
Since the privatisation of the British Steel Corporation in 1988, the Port Talbot works has undergone a number of changes in ownership with Tata Steel assuming responsibility for the plant in 2007. Job losses in recent years have not been on the scale of those made in the 1980s but global fluctuations in the demand for steel and the ever increasing encroachment of technology has resulted in further pruning of the plant’s workforce. From around 6,000 workers in 1981, there are now only 4,000 employed at the plant.
This figure, of course, will be drastically reduced by today’s announcement of 750 job losses. Tata Steel and some politicians have justified these redundancies as an inevitable product of the industry’s present crisis and a necessary step to ensure the plant’s future survival. The current storm facing the steel industry, however, is global and not primarily about staffing levels. Put simply, there are too many plants making steel and not enough people buying. Redundancies and job losses may, in the short term, help Tata balance their books (it is alleged that the Port Talbot works is losing £1 million a week), but it is not the answer to the industry’s chronic situation.