This week, India’s Tata Steel announced that it would be cutting nearly 1,200 jobs at its plants in Scunthorpe and Lanarkshire. These events put the deepening manufacturing crisis in the UK into sharp relief as the layoff effectively marks the beginning of the end of the steel industry in the North.
Tata is the third steel company to announce significant loses and cuts over the past few weeks. Both Thailand’s SSI and Caparo Industries previously operated steelworks in the UK and have also been forced to make similar announcements. Tata Steel were in an impossible position to escape from press criticism. However, Tata’s response to the situation has arguably helped the Company to weather the storm and remain in the strongest position possible.
Immediately following the layoff, Tata Steel, U.S. Steel Corp., and other steelmakers called for increased trade protection from China’s overproduction and the resulting cheap supply of steel (see Wall Street Journal). This action has two major benefits; First, it helps to show that the manufacturers are being proactive to help mitigate the situation. Second, it helps the public to perceive the layoff as the outcome of an industry issue, by diverting the media’s attention away from Tata’s responsibility, and instead pointing towards an alternative macro cause - the oversupply of steel from China.
The industry issue could not be more pertinent, as President Xi Jinping and his wife have been touring the UK as part of the first Chinese state visit to Britain in 10 years. Almost all media outlets which covered the layoff have also investigated the overproduction of steel from China.
Tata’s example once again demonstrates the importance of extensive communication between companies, the media and the public in times of financial distress. A proactive approach to crisis communications helps both the public and the media put things in perspective, and could perhaps even draw sympathy as companies operate in difficult business environments.