With Tata Steel rejecting a two-year £100-million rescue plan proposed by steel unions to save Port Talbot, the biggest of its steel manufacturing plants in the United Kingdom, and deciding instead to put its entire U.K. steel operation on the market, the country’s beleaguered steel industry has been plunged into crisis.
Thousands of workers at Port Talbot, and in plants at Rotherham, Corby and Shotton face imminent job losses should the company opt for closure before a buyer can be found.
Corbyn calls for parliament recall
Labour leader Jeremy Corbyn has called for parliament, currently in recess for the Easter break, to be re-called to discuss the “strategic risk to the United Kingdom if it loses its steel making industry,” BBC has reported.
The government is looking at the option of a management-worker buyout of the operation, a plan that the unions had put forward to Tata Steel, and which the company had rejected.
De-nationalization demand
With the livelihoods of 15,000 of steel workers and their families, and another 45,000 in the supply chain at risk, the call for re-nationalising the steel industry has been raised by the unions and several parties across the political spectrum. The British Steel Corporation was de-nationalized in 1988.
Group Executive Director of Tata Steel Limited Koushik Chatterjee told BBC that the decision to sell came after a nine-year period in which the company made losses of two billion pounds. “It would be difficult to continue to support it in the same manner. If somebody is will[ing] to look at the business we are happy to sell,” he said.
‘Deteriorating financial situation’
Tata Steel in a statement attributed its decision to “deteriorating financial performance of the U.K. subsidiary in the last twelve months.” In a statement the company said that global steel demand has remained “muted” following the financial crisis of 2008.
In addition, the global oversupply of steel – a reference to dumping of steel by China – and “significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency” are behind the decision to sell.
Selling spree
Only last week Tata Steel sold its two Scottish plants at Clydebridge and Dalzell to the Scottish government, from whom Liberty House will buy them. Tata Steel is already in the process of selling its business in Scunthorpe to Greybull Capital, an investment firm.
Roy Rickhuss, General Secretary of the steelworkers’ union Community, the largest in the steel industry has called upon the Tata management to act as a “responsible seller.” He said: “It is vital that adequate time is given for a new investor to be found. Tata has a moral and social responsibility to steel communities and families across the U.K. and must cooperate with the unions and the U.K .government,” he said.
‘U.K. govt. must intervene’
Len McCluskey, General Secretary of Unite, has said that the U.K. government must step in to save the industry. “This is the time for the government to say categorically, without hesitation, that these assets will be taken into safe-keeping by the nation because without them, our economy will not flourish,” he said. “We are already seeing jobs going in the supply chain because of the uncertainty over Tata’s future –- our fear is this will snowball if insecurity is allowed to swirl around our steel sector.”
No time-frame, but willing to hold on
Tata has made no commitment on a time-frame to sell, but has indicated that it cannot hold on to its loss- making steel operations for much longer.
