Member Article

Yorkshire jobs at risk as Tata Steel announces sale of division to Genevan firm

Thousands of Tata Steel jobs are potentially at risk in Scunthorpe and York as the firm announced that it had signed a memorandum of understanding with a Genevan firm to sell its Long Products Division.

Unions are up in arms accusing Tata Steel of failing to consult them on the company’s plans, risking a total of 6,500 UK jobs.

Tata said it had signed a Memorandum of Understanding with the Klesch Group, an industrial company which operates across Europe.

The planned sale covers several UK-based 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, as well as other operations in France and Germany.

Karl Koehler, chief executive of Tata Steel’s European operations, 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.

“We are making huge strides on our strategic journey to become a premium, customer-centred steel company thanks to investment in equipment, technology and customers, together with the substantial contributions from our employees.

“We’ve improved the competitiveness of Tata Steel’s European operations, including Long Products Europe which now supplies more of the innovative steel rail, rod, plate, sections and special profile products demanded by customers.

“Accelerating the pace of innovation on advanced steel solutions, helping our customers succeed in their markets and creating a sustainable asset base requires significant capital and expertise.

“We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies.

“We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that.”

The steel union Community, Unite and the GMB said in a joint statement: “Tata Steel has failed to consult at all with the trade unions before making this move, which could have serious consequences for employees and contractors right across Tata Steel, not just within the Long Products business that it wants to sell.

“The unions have been treated with contempt in this process as the level of consultation that we would expect ahead of such a major strategic announcement has not taken place”.

The Business Secretary Vince Cable said he welcomed assurances from Klesch about the continuity of the business but would be seeking further clarification on its plans.

This was posted in Bdaily's Members' News section by Clare Burnett .