Is there light at the end of the steel tunnel?
1 June 2016
4,800 jobs have been saved after Tata Steel finalised the sale of its long products, including construction steel and railway tracks to Greybull Capital.
The move, which will also help to restore the name of the steel industry, came after initial talks with Greybull in December 2015, before the Indian conglomerate decided they wanted to sell all of its UK businesses.
The sale of the loss-making businesses includes plants in Lincolnshire, Scunthorpe, Teeside, York and Workington.
The Indian company announced in a press release sent out last night, “Tata Steel UK today announced the completion of the sale of its Long Products Europe business to Greybull Capital LLP.”
As part of the deal to salvage the business, employees have agreed to a 3% pay cut.
Bimlendra Jha, chief executive of Tata Steel UK, said: “As a responsible seller, Tata Steel is delighted to have secured a buyer for this business and we hope that under Greybull Capital ownership, the business will continue the momentum of the improvement programme that has been initiated in the last 12 months.
“Employees and trade unions have worked closely with the long products (Europe) management team to improve the business’s prospects, putting it in a more competitive position than it has been for many years.”
David Cameron’s has pledged to support the sale by contributing hundreds of millions to a deal, with a 25% profit cut in return.
Committee Chairman at Scunthorpe Works, Paul McBean said, “I am delighted we are relaunching our fantastic business as British Steel. It marks a new start, and a new chapter, for our business.”
However, some members of the general public aren’t so pleased with the move. Comments generated on the Guardian website showed levels of cynicism. One member wrote, “I don’t understand why it should be the government’s responsibility to save an industry which is in obvious decline.”
To which provoked a response: “That’s not the problem. The issue is 4000 jobs all in the same area! That definitely is the job of government to deal with as it destroys communities for generations. 6000 jobs at Jessops, Comet or wherever, spread around a whole country is far more manageable.”
So far, no buyer has been confirmed for the remaining Tata Steel businesses, however, the ‘preferred bidder’ is to be announce in June 24th.
After the announcement of the current deal, Tata has made no attempt to reveal the fate of its remaining UK steel assets, which employ approximately 11,000 people, including the blast furnaces at Port Talbot, South Wales.