India’s Tata Steel is in talks to sell its Scunthorpe steelworks after agreeing to hive off a division that employs thousands of workers in the UK.
The planned sale, to the Geneva-based commodities investment firm Klesch Group, covers several UK sites including Tata Steel’s Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York.
About 6,500 people are employed at the Long Products Europe division, which also has operations in France and Germany.
The trade unions representing the workers – Community, Unite and GMB – said Tata Steel had failed to consult with workers before making the move. They said in a joint statement: “The fact that Tata Steel wants to abandon half of its European operations and pull out of an entire strategic market does not bode well for the future and ends Tata Steel’s vision to be a global steel player.”
The general secretary of the steelworkers’ union Community, Roy Rickhuss, said: “We’re extremely disappointed with the way that Tata Steel have handled this announcement, which does not reflect well on Tata’s values.” He added that Tata Steel chairman, Cyrus Mistry, has now agreed to meet the unions.
The head of Tata Steel’s European operations, Karl-Ulrich Köhler, said: “We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome. We will regularly engage with our employees and other stakeholders throughout this process, and we will consult with the trade union representatives and works councils.”
The unions called on the UK government to intervene and ensure a future for industrial assets of “strategic importance” to the UK’s construction, infrastructure and manufacturing base.
UK business secretary Vince Cable said: “The next few months will be a time of uncertainty for the company and employees. The proposed sale shows the harsh reality of trading conditions in parts of the steel industry. I met the global head of Tata in India this week and he has personally reaffirmed to me his company’s commitment to the British steel industry and to investing substantially in Port Talbot and strip steel.
“My officials and I will continue to work closely with Tata Steel and seek to meet the potential buyer, Klesch, to understand more about their plans. We welcome Klesch’s stated intention to support the continuity of the business.”
