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High technology, new steel plant -- but scant orders

The spokesman for British Steel Corporation's Teesside Division sits with his back to the window in the management's new headquarters building. From the building -- nicknamed "Alcatraz" after its brown brick facade, cannon-slit windows, airconditioned tightness, and low, bunkerlike landscaping mounds -- the view takes in some of BSC's 830-acre South Teesside site. On the horizon: Europe's biggest blast furnace, commissioned in 1979.

He ticks off the details of the Redcar (ironmaking) and Lackenby (basic oxygen steelmaking) plants in the complex:

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* Ironmaking capacity (blending ores from Canada, Brazil, Australia, and Sweden which come into East england's deep-water port here) of 10,000 metric tons per day.

* Steelmaking output (using iron transported red hot from Redcar to Lackenby by rail in specially built "torpedo ladles") of 5 million tons per annum.

* Employment for 20,000 people.

* L600 million ($1.3 billion) investment since 1974.

* L34 million ($75 million) spent on antipollution equipment.

* 142 acres of "green belt" -- including the Coatham Marshes, known for migratory birds -- to separate the works from residential areas.

Then comes the clinker. "What we haven't got is orders," he says, adding that "in the long term, we don't see any improvement."

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With a strike having started earlier this month, steelmaking has been much in the news. Unlike the miners, who had won a 20 percent wage increase, the steelworkers had been offered only 6 percent.

But the BSC board, with a Mother Hubbardly look into its fishcal cupboard, had not much to give except further bad news. They announced work-force cuts of 52,000 jobs (leaving 100,000), and a slimming of manned plant capacity from 21.5 million tons per year of liquid steel to about 15 million tons.

Even Teesside itself, after its five-year building program, will not escape. Several thousand employees will be made redundant (laid off) early in 1980, and the 5-million-ton capacity will lope along at about 3.5 million tons. Also announced: the complete shutdown of several plants. One shutdown, at Consett in County Durham, will throw 4,000 more steel- workers out of work in the northeast and impoverish the economy of a town of 35,000 which has no other major industry.

BSC board chairman Sir Charles Villiers sees this as a critical year in the nationalized industry's 12-year history. If overcapacity can be trimmed and productivity increased (it is now well below international figures in tons per man), the board hopes to turn around last year's operating losses averaging L800 ,000 ($1.76 million) per day.

What has brought the industry to this pass?

Steelmaking on Teesside, to be sure, has had a checkered history of boom and bust since the ironworks began to grow in 1850. Then, a low-grade but easily mined ore from local hills was fired with Durham County coking coal. Eighty years later the south bank of the Tees was peppered with blast furnaces. Now there is only the one furnace at Redcar, which, with its computer controlled round- the-clock operation and its much-reduced staff of 437 workers, makes more iron per year than has ever been made on Teesside.

But now, as then, orders have proved fickle, and the industry has been lock stepped into the march of world economics. Compounding the problem appear to be the unions, whose members have yet to be convinced that the cupboard (which they see as the government's larder) really is bare.

But management attitudes may also be at fault. Several spokesmen at different BSC plant obviously felt such sympathy for the slowly sinking work force that their willingness to defend the management's position was compromised.

And one middle manager frankly admitted his distaste for his superiors. He felt they had compelled the industry to live in a state of constant threat and uncertainty for several years before at last wielding the axe. His personal solution: escape from Alcatraz (symbol, perhaps, of the distance between management and workers?) into the Yorkshire dales 25 miles away. For him the corporate life has gone sour. "I wouldn't mind being a village postman," he says.

Still to be reckoned with are the long-term social implications of a changing industry. Tucked away in a BSC promotional flier is a significant sentence: "Steel . . . can no longer be regarded as a labour intensive industry."

What has poured into Cleveland County (half the size of Rhode Island) over the past decade is money. Over 40 percent of recent capital investment in the United Kingdom has centered here.

What seems to be coming out the other end of the pipeline -- at least for one of its giants -- is a mixed blessing: improved productivity and increased unemployment.


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