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EDITIONS
Wednesday, 24 July, 2002, 15:35 GMT 16:35 UK
Double jobs blow hits 1,100
Allied Steel and Wire at Tremorfa, Cardiff
Harsh trading conditions at ASW are being blamed
A total of 800 steelworkers in Cardiff are to lose their jobs with the closure of ASW and 300 MoD employees will be out of work as the government closes one military range and reorganises another in Wales.

On Wednesday, receivers appointed to steel manufacturer Allied Steel and Wire (ASW) have confirmed that production will not recommence at the plant in the Welsh capital.

Meanwhile, news from Westminster confirmed that the Ministry of Defence is to close a number of military ranges - including Llanbedr in Meirionydd, north Wales, where 164 jobs will go.

It is a part of Wales where only last week it was announced 300 jobs would go in the Dewhirst textile plant, in Cardigan.

There is also a shake-up to at the west Wales testing base in Aberporth - it will convert into a instrumenter training range with the loss of 147 jobs.

Welsh Secretary Paul Murphy said he understood the MoD jobs would be phased out over two years.

"I know Qinetiq - the Ministry of Defence owned research company - the Welsh Assembly and its agencies and the employment services will leave no stone unturned to try to attract alternative employment for workers and their families."

Earlier on Wednesday, the Iron and Steel Trades Confederation (ISTC) said receivers were handing out redundancy notices to the staff at Cardiff firm ASW by the end of July.

Aberporth military training range
A total of 147 jobs go at Aberporth

Production at the Castle Works at Tremorfa, Cardiff, will not restart after the firm's two-week annual shutdown, which begins on Friday, 26 July, receivers confirmed.

But it is understood that ASW management does not believe receivers KPMG - appointed two weeks ago - have spent long enough looking for a buyer.

The majority of the 650 production staff will be made redundant on 31 July. Other staff will be retained temporarily to wind down the plant.

More than 100 workers at the Castle Nails plant - which is on the same site - will keep their jobs, following interest from other firms.

ASW has blamed harsh trading conditions for its downturn, with the influx of cheap European imports and increasing costs of raw materials.

The company issued warnings last month of "significant pressure" on its cash flow, leading to urgent talks with bankers.

US steel tariffs

KPMG said the firm's history of trading at a loss meant it could not allow ASW to continue trading.

ISTC general secretary Michael Leahy said it was "devastating news" for workers.

"It is also a major blow for those companies in the UK construction industry for whom ASW is the only supplier of rebar," said Mr Leahy.

ASW went into receivership on 10 July when its banks refused to bankroll the company after it had endured a rough economic ride on the stock market in the wake of US steel tariffs.

Dr Lewis Moonie, Under Secretary of State for Defence
Lewis Moonie said the cuts would save �300m

The firm's share price had dropped to just 2.5p after riding high at more than 100 times as much at its peak.

Chief executive Graham Mackenzie - a vocal critic of America's import duties on foreign steel - employs about 1,000 at Cardiff, 300 at Sheerness in Kent and 30 at Belfast.

Economic Development Minister Andrew Davies and the Welsh Assembly made their now-regular gestures of training aid when the company collapsed three weeks ago.

But he said he was unable to bail out ASW under European Union state aid rules.

The firm is a key component of Cardiff's industrial economy and a familiar sight for the community, in the shadow of the Welsh Assembly at Cardiff Bay.

The announcement of jobs losses on military ranges was made by Dr Lewis Moonie, Under Secretary of State for Defence, on Wednesday afternoon.

He said the test and evaluation business had been in need of re-evaluation for years.

The cutbacks are regarded as a shock in light of the defence spending review, which has seen the MoD gain a 4% budget boost.

But Mr Moonie said the job cuts in Wales - and 100 in Scotland - will deliver net savings of more than �300m over 25 years.

The changes, he added, would transform the test and evaluation business into "the effective, modern organisation that we require".

 WATCH/LISTEN
 ON THIS STORY
BBC Wales' Miles Fletcher
"This is the end of ASW in Wales"
BBC Wales' Rhys Evans
"The cutbacks are a shock in the light of the defence spending review"
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27 May 01 | Vote2001
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