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Rowecord Engineering, Newport: Collapse could affect suppliers Rowecord Engineering, Newport: 430 jobs lost, say administrators
(about 4 hours later)
The collapse of Wales' biggest steel contractor could affect other companies along the M4 corridor which supplied it, administrators say. Some 430 people will lose their jobs after the collapse of Wales' biggest steel contractor, administrators have confirmed.
Newport-based Rowecord Engineering, which employed around 400, built the roof of the Olympic aquatic centre. About 80 people will be kept on at Newport-based Rowecord Engineering, which built the roof of the Olympic aquatic centre.
Earlier it was revealed that the company was offered but declined help from the Welsh government before it collapsed.
The company said it had "exhausted every option" to try to carry on.The company said it had "exhausted every option" to try to carry on.
Alistair Wardell, from administrators Grant Thornton, said: "This is a devastating blow, not just for the Rowecord workforce which will be affected, but for the Welsh economy as a whole. There are fears other companies along the M4 corridor which supplied Rowecord could also be affected.
"It is also likely to have an impact on the number of other companies along the M4 corridor that up until now have been suppliers to Rowecord. Alistair Wardell, from administrators Grant Thornton, blamed the collapse on the company losing money on contracts and the general economic climate, which had led to future contracts drying up.
"Among our roles as administrators will be to explore which, if any, parts of the business can be salvaged and whether any jobs can be saved." A contract to build the new blast furnace at Tata's Port Talbot steelworks had overrun by more than three months which had caused difficulties, he said.
He added that a number of Rowecord employees will be retained in the short term to complete work in progress. Mr Wardell told BBC Radio Wales the issue had led to a dispute with Tata but he could not say for certain whether the business would have survived otherwise.
"I think certainly, in the short term, that amount of cash that was not available to it has partially precipitated the collapse of the business," he said.
"We are taking about a large amount of money.
"What I can't comment on is... ultimately whether this was a viable business or not. That is a very separate question."
In an earlier statement, Mr Wardell said the collapse of the company was also likely to have an impact on other firms along the M4 corridor which were its suppliers.
Vital partner
A spokesman for Tata Steel said the company had settled the issue about the overrunning of work on the blast furnace a month ago.
He described Rowecord Engineering as a vital partner.
"We have met all our commercial obligations," he said.
"We have offered them future work. It will cost us to replace them."
Earlier it was revealed that Rowecord turned down an offer of help from the Welsh government before it collapsed.
The Olympics aquatic centre roof was among its many high profile projects.The Olympics aquatic centre roof was among its many high profile projects.
The Welsh government said it offered assistance to the maximum level allowable within state aid rules but Rowecord turned down the offer.The Welsh government said it offered assistance to the maximum level allowable within state aid rules but Rowecord turned down the offer.
Until recently the company employed over 500 staff at sites in Newport, Baglan, and the Tata Steelworks at Port Talbot - but 100 of those were given notice over recent months.Until recently the company employed over 500 staff at sites in Newport, Baglan, and the Tata Steelworks at Port Talbot - but 100 of those were given notice over recent months.
In a statement on Friday the company said it had "exhausted every option to sustain the business in future" and would go into administration.In a statement on Friday the company said it had "exhausted every option to sustain the business in future" and would go into administration.
Tory business spokesman Nick Ramsay said he accepts that help was offered but told BBC Radio Wales it came too late in the day.Tory business spokesman Nick Ramsay said he accepts that help was offered but told BBC Radio Wales it came too late in the day.
"You've got to face the fact there are these drop-offs in ordering linked to the recession," he said."You've got to face the fact there are these drop-offs in ordering linked to the recession," he said.
"Although the Welsh government did offer support I think that was later in the day than it might have been."Although the Welsh government did offer support I think that was later in the day than it might have been.
"I think what we really need to see from the Welsh government is a better manufacturing strategy, for the government to stand back and say 'right, how are we going to better support companies like this?'"I think what we really need to see from the Welsh government is a better manufacturing strategy, for the government to stand back and say 'right, how are we going to better support companies like this?'
"They [engineering firms] are a section of the economy and there are other areas the economy can diversify into but if you continually lose companies like Rowecord, then I think at the end of this process Wales will be a poorer place economically."
Rowecord has been a steelwork contractor on major projects, including:Rowecord has been a steelwork contractor on major projects, including:
Ron Jones, Labour councillor in Newport's Pill ward, which covers Rowecord, described the news as a "major blow". Ron Jones, a Labour councillor in Newport's Pill ward, which covers Rowecord, described the news as a "major blow".
He added: "It's devastating to us actually because as an area of high unemployment, in excess of 20%, and this is adding to all that misery.He added: "It's devastating to us actually because as an area of high unemployment, in excess of 20%, and this is adding to all that misery.
"They have been here since 1970. They are a major company in Newport and when a major company goes to the wall you're in deep trouble.""They have been here since 1970. They are a major company in Newport and when a major company goes to the wall you're in deep trouble."
Jonathan Deacon, a reader in marketing and entrepreneurship at the University of South Wales in Newport, said the recession has hit a major firm hard.
"I think many large projects have been cut back economically and that pipeline of those big projects has just dried up for this company," he said.
"This recession has bitten long and hard. This is a 10-year recession and we've not seen the back of it yet and there's going to be casualties like this. "
Unite union officer Brian Godsell said on Sunday workers were "devastated" and he was surprised Rowecord had turned down an offer of help from the Welsh government.
The Welsh government called it "very disappointing news".