This Steel Town Voted For Brexit. Now Its Jobs Are In Jeopardy
When the United Kingdom voted to leave the European Union last month, the seaside town of Port Talbot in Wales eagerly went along with the move. Brexit was approved by some 57 percent of the town's residents.
Now some of them are wondering if they made the wrong decision.
The June 23 Brexit vote has raised questions about the fate of the troubled Port Talbot Works, Britain's largest surviving steel plant — a huge, steam-belching facility that has long been the town's biggest employer.
Before the vote, Tata Steel, the plant's owner, was negotiating to sell all or part of its British operations, of which Port Talbot is the biggest part. To sweeten the deal, Britain's conservative government was reportedly ready to offer buyers a low-interest loan and assistance with the plant's massive pension liability
Once Brexit was approved, Tata announced it was putting the sale on hold.
The vote left big questions about the market for Port Talbot steel, much of which goes into autos that are sold throughout the 28-member European Union, says Ben Orhan, senior economist at IHS Global Insight Pricing and Purchasing.
Much of the rest goes into construction, which is widely expected to take a big hit if, as some people predict, Britain enters a recession, Orhan says.
"People are expecting the worst, and when your main market is construction steels, you are going to be thinking, 'Is that going to still be there in three, four, five years' time?' " Orhan says.
More recently, Tata said it was considering restructuring all of its European operations as part of a joint venture with the German company Thyssenkrupp. Koushik Chatterjee, group executive for Tata Steel in Europe, told the BBC the future of Port Talbot depended very much on what kind of agreements could be worked out with the government and the plant's 4,000 employees.
Part of India's giant Tata conglomerate, Tata Steel is Europe's second-biggest steel producer, with highly efficient plants in the Netherlands, Germany and France. But with the huge glut of steel on the market, caused in great part by a flood of cheap Chinese exports, it's become much harder to make money, especially at less technologically advanced facilities such as Port Talbot, Orhan says.
All of this has heightened the uncertainty in the town, where opposition to EU membership remains strong.
"We want more control of our own laws, rather than laws imposed by Europe," says Kevin Hillier, a retired surveyor who was walking his dog in a Port Talbot park over the weekend.
"And immigration is a big factor as well. A lot of immigrants are coming here and taking low-paid jobs so our youngsters can't even get low-paid jobs," he adds.
But retired steelworker Robert Jones, who voted for Brexit, says a lot of people supported the move without necessarily understanding the impact it could have on the plant.
"None of us knew exactly what was happening. We just listened to people and we voted in or out or whatever," he says. "Now the consequences are coming in, and some people are worried about the way they voted and some people are not."
For the town, the potential impact is dire.
Port Talbot has endured numerous ups and downs since its heyday in the 1950s, when jobs were so plentiful and lucrative the plant was called "Treasure Island," says Bleddyn Penny, who wrote his doctoral dissertation on the plant at Swansea University. Over the years, steel-making became more productive, and the British steel industry had to struggle with competition from cheaper overseas rivals, Penny says.
Today, the plant's workforce is about a fifth of what it was in 1961, which has robbed the town of much of the economic vitality it once enjoyed, Penny says. Its High Street, once a bustling, crowded place, is today pockmarked by closed shops.
One thing everyone agrees on is that losing the plant would be something of a death blow to what remains of the town's economy.
"Everything in Port Talbot — the entire local economy — is entwined with the steel industry, and if people get made redundant, they don't have the disposable income then to go back and spend on local goods and services, and everyone feels the effects," Penny says.
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