In May 2010, shortly before losing a General Election, the then Prime Minister Gordon Brown visited Sheffield Forgemasters. Eleven years later the company is back in the news after a very unusual takeover.
The Ministry of Defence is expected to formally take control of Sheffield Forgemasters later this month, guaranteeing the supply of specialist steel for the Royal Navy’s fleet of nuclear submarines.
The deal will be completed on 19 August if the former chief executive, Graham Honeyman, and other shareholders agree to sell their stock to the MoD.
The firm’s 600 employees, represented by a trust, also have to agree to the deal but seeing as the alternative is unemployment it seems like that will be a formality.
So what is Sheffield Forgemasters and why is it so important?
The company can trace its origins back to the 1750s when, at the start of the Industrial Revolution, Sheffield in Yorkshire was beginning to become an important centre for the steel and iron business.
In 1983 the River Don steelworks merged with another Sheffield firm, Firth Brown Steels, to create Sheffield Forgemasters.
In the 1990s it began to specialise in making parts for the Royal Navy, and especially for its fleet of nuclear submarines.
Among the items they manufacture are torpedo tubes, steering shafts, missile compartments and components for the nuclear island, which protects the submarine’s reactor core.
In 2010, soon after David Cameron became Prime Minister and declared a campaign of austerity, he refused to honour an £80 million loan which his predecessor, Gordon Brown, had agreed to give Sheffield Forgemasters.
But the firm has soldiered on, largely due to loan guarantees from its big defence industry customers – BAE Systems, Rolls-Royce and Babcock.
It laid off 95 workers last year when the Navy’s Dreadnought nuclear submarine programme came to an end.
But the Conservative Party – who have been opponents of nationalisation for so long – have shifted under Boris Johnson, who sees limits to globalisation and believes Britain needs to manufacture certain key products in this country.
For the Royal Navy, the idea of importing steel for its submarines from China, South Korea or elsewhere was horrendous and the US steel industry is running at full capacity for the US Navy.
So the MoD has spent £2.6 million acquiring Sheffield Forgemasters and says it will invest up to £400 million over the next 10 years on new equipment at the factory.
The British steel industry has struggled to compete against cheap Chinese steel imports in recent years and numerous steelworks have closed or been sold to foreign buyers.
The company’s chief executive, David Bond, said: “Sheffield Forgemasters and its shareholders are not able to fund an investment of this size and so this acquisition marks the culmination of a process, started two years ago, that enables us to be a reliable and secure supplier to defence for the long-term.”