Tata confirm reports they are to sell off UK steel operations
Owners of Shotton steel Tata has confirmed plans to sell its UK business, threatening thousands of job cuts.
Tata Steel’s 11 man board concluded that a plan aimed at saving the Port Talbot plant which is reported to be making a £1m a day loss, was unaffordable.
In a statement issued in Mumbai, Tata said it noted with “deep concern” the deteriorating financial performance of its UK subsidiary in the last year.
The board unanimously concluded that a plan aimed at saving plants including Port Talbot in South Wales was unaffordable, said Tata, adding it had been in “deep engagement” with the UK Government in recent months seeking its support to achieve the best possible outcome for the UK business.
The statement said:
“Following the strategic view taken by the Tata Steel Board regarding the UK business, it has advised the board of its European holding company ie Tata Steel Europe, to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts.”
This would include the sale of Shotton, Rotherham, Corby and Port Talbot.
The statement goes on to say:
“While the global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency.
“These factors are likely to continue into the future and have significantly impacted the long term competitive position of the UK operations in spite of several initiatives undertaken by the management and the workers of the business in recent years.”
Unions reacted with shock and anger at the company’s decision taken at a board meeting in Mumbai, union leaders had travelled to Mumbai in an effort to persuade Tata to invest in the business.
Roy Rickhuss, General Secretary of the steelworkers’ trade union Community, said:
“We travelled to Mumbai to secure a future for steelmaking in South Wales and we are disappointed that the future remains uncertain, not just for Welsh steelworkers but for thousands more workers in Tata’s businesses elsewhere in the UK.
“We will of course wait to see the detail of Tata’s divestment plans but, as we said before, it is vitally important that Tata is a responsible seller of its businesses and provides sufficient time to find new ownership.
“There is also a crucial role for both the Welsh and UK governments to do all they can to ensure a future for Tata’s remaining UK steel businesses and to provide every assistance to secure a buyer that will continue steel making.
“We don’t want just want more warm words, we want a detailed plan of action to find buyers and build confidence in potential investors in UK steel.
Responding to the news emerging from Mumbai First Minister Carwyn Jones said:
“I want the Welsh steelworkers and their families to know that no stone will be left unturned in our bid to support you through what comes.
“Whilst we have serious disagreements with the U.K. government on many issues at the moment, we will work with them and anyone else, who can help to secure a sustainable steel industry in Wales
“Wales has faced up to tough times before, we will always stand in solidarity with our brilliant, skilled workforce and with our communities.”
The UK and Welsh governments in what’s believed to be a ‘first’ released a joint statement it said;
“This is a difficult time for workers in Port Talbot and across the UK. During the review process, we remain committed to working with Tata and the unions on a long term sustainable future for British steel making.
““Both the Welsh and UK governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.”
Plaid Cymru Leader Leanne Wood released a statement on YouTube she said;
“Plaid Cymru will stand side by side with steel workers and calls for every party and every government to work together to save the steel industry in Wales”
Jeremy Corbyn, Labour leader, said ministers had to act to protect the steel industry and the core of manufacturing in Britain.
“It is vital that the government intervenes to maintain steel production in Port Talbot, both for the workforce and the wider economy, if necessary by taking a public stake in the industry,” he said.
Missing In Action.
Angela Eagle MP, Labour’s Shadow First Secretary of State said families and their communities will be desperately worried about the developments, she said;
“Steel workers at Tata, their families and their communities will be desperately worried this evening as they face ongoing uncertainty.
“Steel is a foundation industry that is hugely important for our economy. The Government should be doing everything possible to protect the industry in the short term as it faces this perfect storm.
“But after months of complacency and after a budget with no strategy for steel, Sajid Javid and his team seem to have gone missing in action at this crucial time. The Government needs to do whatever it takes to save this vital strategic industry which is the cornerstone of our manufacturing sector.”
Assembly Must Now Be Recalled
Welsh Conservatives and AM for South Wales Central Andrew RT Davies said their thoughts are first and foremost be with the people of Port Talbot who will be devastated by the news.
“Its quite clear that the Assembly must now be recalled prior to dissolution, and I note that William Graham, in his capacity as Chair, has also called for an emergency session of the Business & Enterprise Committee.
“Back in February I wrote to the other party leaders to assess support for a cross-party delegation to meet the commissioner in Brussels to discuss the issue of Chinese steel dumping, and it’s vital that we speak with one voice in the fight to secure a viable future for Welsh steel.”Above all, the workers and sub-contractors at TATA want to see every possible avenue
“Above all, the workers and sub-contractors at TATA want to see every possible avenue investigated, both to ensure a successful sale and to secure a sustainable future for the industry in Wales.
This issue goes above party politics and all parties wiIl have to work together to achieve this. Earlier in the evening, the government had denied a claim that it was on standby to part-nationalise Port Talbot.
More Union Reaction
Dave Hulse, national officer of the GMB union said: “This is absolutely devastating news for all our members, their families and the local communities. Tata has let the whole of the UK steel industry down.”
Unite general secretary Len McCluskey said: “This is a very dark day for the proud communities and a proud industry which is now on the verge of extinction in this country.”Earlier in the evening, the government had denied a claim that it was on standby to part-nationalise Port Talbot.
The government denied on Tuesday evening a claim it was ready part-nationalise Port Talbot amid repeated rumours that the state could step in to rescue the industry.
The Shotton site employs around 750 people producing metallic and paint coated products for the construction industry and domestic appliances.