12. The closure of the works
But all was not well with the British Steel Corporation. They had started with a flourish, adopting an expansionist policy based on the efficiencies of size. This lead to their creating five massive plants as their centres of production. This was almost bound to lead to problems, such as underinvestment, for the existing smaller units such as Bilston – which, whilst vast and vastly important in the context of Bilston, was quite small compared with the five giants. BSC’s plans were also caught out by a worsening general economic climate. Their plans were based on meeting an estimated need of 30 million tons per annum; but it soon became clear that the need was actually about 16 million tons per annum. Not only that but there shortages of scrap – an essential ingredient in the process – that was driving up the price of this essential raw material. Perhaps even worse was the increasing competition. Part of this came from the UK as the unusual structure of the nationalization had brought only part of the industry into public ownership and did nothing to stop new firms being set up. The other part of the competition came from abroad, not only from places such as Germany, France and Sweden, but places further afield, many of which had set up iron and steel industries with the assistance of the UK which had exported expertise and know how. Many people, especially those to the political right, emphasized that BSC’s problems also arose as a natural result of the bureaucratic nature of nationalized industries, and the lack of commercial flexibility that entailed. The set up of the BSC also ensured that they could not take major decisions without getting the approval of central government, with the delays and uncertainties that involved.
In this poor climate for the whole industry many felt that the Bilston steel works had got the worst of the deal; and that the eventual closure of the works was not the result of decisions taken in 1978 or 79 but the result of a string of decisions taken earlier. In a clear, well argued and powerful letter (sent to Councillor Jim Speakman, a Conservative councilor for Bilston and energetic campaigner against the closure, and to Sir Keith Joseph, the shadow spokesman for trade and industry, Stanley J. Smith, a former Metallurgical Manager at the Bilston steel works, described the way the works had been undermined. He points out that in 1970 the Bilston works were directed into the Special Steels Division of BSC at Sheffield. He goes on:
“In my opinion Bilston works has been politically killed off by Sheffield Division in the following distinct stages:
1. Bilston is accused of being technically obsolete, being based on Open Hearth Steelmaking as distinct from the more modern Electric Furnace process as operating in Sheffield and Rotherham.
This completely ignores the fact that under the previous Tubes Division, Bilston had developed a scheme to completely modernise its processes, based on Electric Furnaces and a new mill which had reached the stage for final approval by 1970. On entering Special Steels Division this development was immediately shelved by the new Divisional management in favour of developing Rotherham and Sheffield works. From that time onwards the only developments permitted at Bilston were those necessary to Keep the works in production.
2. In 1972 the Special Steels Division was reorganised into an Alloy Steels Group and a Carbon Steels Group, Bilston being placed in the latter works category. Bilston’s alloy tube steels order book was then (logically)? transferred to Sheffield works. Bilston countered the drop in order volume by developing a wider range of products, particularly by increasing its capacity for tube billets from 10” diameter maximum to 12” and subsequently 14" diameter.
3. While customers were allowed to order from individual works, Bilston continued to thrive, even although at a lower output than its potential. This changed when in 1976 a Divisional Order procedure was introduced whereby customers ordered centrally and the Division allocated the producing works. The Divisional ordering procedure was based in Sheffield and from that moment Bilston lost its power of competition.
4. Bilston’s prime role had been the production of seamless tube billets in its original Stewarts & Lloyds organisation and specialised in this field. Despite constant requests for adequate specialised inspection equipment for these billets, when such equipment did become available it was installed not in Bilston but in Sheffield.
5. The new a equipment for inspection having been installed at Sheffield, Bilston's carbon steel tube billets order book was then largely transferred in April 1977 to Sheffield works.
6. Bilston's economy depended on liquid iron for steelmaking being available from "Elizabeth" [sic] blast furnace. In November 1977 the Division ordered closure of "Elizabeth” [sic] resulting immediately in steelmaking productivity being almost halved. From a constant profit making plant, Bilston immediately became a loss plant.
7. Having eliminated "Elizabeth" [sic] the number of steel furnaces in operation could be reduced, thereby exacerbating the loss position and, making Bilston a liability instead of an asset.”
Although most Bilstonians would agree with this reading of the historical record, many of them were still arguing in 1979 that the Bilston works were still making a profit or, if they were not, could readily be made to do so by some limited investment. Some felt that the writing was on the wall even earlier. The Clean Air Act of 1968 (a much tougher measure than the original Act of 1956) was a threat. £4.3 million pounds were allocated for measures to deal with air pollution from Bilston works but when this project was cancelled many felt that the future was going to be hard.
The closure was fought against by local people as far as they were able. It was particularly hard for people to understand why the works were to close when they were running profitably. The local Labour Party and Conservative Party called a truce in order to co-ordinate the fight and letters and protests were fired off in all directions. Some tried to deal directly with the Government and got an Early Day Motion put down in the House of Commons. Others approached Sir Keith Joseph, the oppostion spokesman, to try to get a public inquiry into the whole affair. The trade unions, lead by Bill Sirs, General Secretary of the Iron and Steel Trades Confederation, confronted BSC and the Government directly and had innumerable meetings with them. The arguments were based largely on the fact that one should not close a profitable concern. To that argument Mr. R. Scholey, the Deputy Chairman and Chief Executive of BSC replied: “it is my view that you have not taken on board the “systems effect” – i.e. the effect of investment in new and lower cost steelmaking capacity upon some of the older and less efficient works. As I have often described to you and your colleagues, the issue the Corporation has to consider is not whether Bilston on its own has been profitable in the past, but whether the profitability of the Corporation as a whole should be improved by around £12.5 million per annum if iron and steelmaking in Bilston were closed and steel, which can be produced more cheaply elsewhere, used to feed the mill. As Mr. Pennington’s letter of the 30th May, 1978 pointed out, investment which has taken place in other works in both the public and private sector, has pre-empted the justification for any new steelmaking investment at Bilston”.
This argument would not have been well received in Bilston. Nor, indeed, ought it to have been received well anywhere else as it appears to be saying that BSC will not invest in profitable sectors preferring to invest in cheaper production in loss making sectors. It does not even allow for the widely recognized fact that Bilston was producing high quality steel for which there was proven demand. To this it seems to add that now BSC has invested elsewhere it is not going to invest in Bilston – an argument which adds strength to Stanley Smith’s explanation of the decline and fall of the Bilston works.
There were many suggestions for different approaches. The two main suggestions were to keep only the mills open, reducing the work force to about 600. Another was to invest in an electric arc furnace to replace the old fashioned open hearths. But none of the alternative proposals suited BSC’s plans.
Another leading argument against the closure was its social cost. Bill Sirs, in an open letter to the BSC, referred to “the serious problems that would be created arising from the social consequences of the act of closing down the Bilston plant that would place the community in a very distressed position as far as employment in concerned. One wonders if the total cost of thrusting many hundred of people onto unemployment benefit, plus all the other costs involved, have been taken into consideration in the full assessment of the plans of the Special Steels Division management”.
That social cost was something that Bilston was soon to pay, in double measure, for not only were 1,900 employees of the works thrown out but, such a large proportion were they of the population of Bilston, that all those who were concerned with supplying goods and services in the town were to fall on hard times too.
The trade unions, locally and nationally, fought the closure with the emphasis very much on the economic issues: the quality and costs of the product and the demand for it, rather than simply on the basis of demanding that jobs be kept at all costs. Every trade union represented on the site was involved. They commissioned a report on the works from Aston University which showed, amongst other things, that the works were held in high regard by it customers; and predicted that, if the works were closed, then their orders would not go to Rotherham, as BSC supposed, but would go abroad. In the event that is what happened. At a meeting in 2009 to commemorate the closing of the works, Lord Turner of Bilston, who, at the time of the closure had been an active trade union representative, recollected that when he was an MP he had stood on the terrace of the Houses of Parliament watching the central steel hub of the London Eye being shipped up the Thames. It had been made in Hungary. And there was a further irony. An argument against Bilston had been that it was reliant on open hearth furnaces which were now, compared with electric arc furnaces, outdated. But the Bilston works had produced a report which showed that open hearth furnaces could produce just as quickly as electric arc furnaces, and do so more quickly and more flexibly. BSC were unable to accept that finding, being heavily committed to electric arc furnaces. So Dennis Turner MP noted with sadness that the London Eye hub had been made in an open hearth furnace.
There was a national strike in which Bilston participated energetically. The workers organised a march through town, which was widely supported by the townspeople. About 500 workers went on the occupy the works where they rekindled G furnace, which BSC had closed won without consultation.
The fight against the closure failed. It is difficult to fight the decision of a monolithic organization like the British Steel Corporation, especially when the government will not intervene, and when the closure had been set up for years. When the decision to close was finally confirmed there were many local people who noted that the body which took the decision had a number of Sheffield men on it and no one from Bilston.The closure of the steel works in 1979 was one of the heaviest blows ever to strike Bilston. It was not the only works to be closed at that time and the union called a strike demanding “no more closures and 20%” (20% being about the rate of inflation at the time). It continued until April 1980 when the union was, in effect, defeated. The only comfort that Bilston people might have got from all of this was that the redundancy payments negotiated by the unions were the best for any plant in the UK.