Tata Steel claims that to make its UK Strip Products business compete in what it described as 'Europe's lower market demand era' it will need to reduce costs 'equivalent to the loss of about 400 jobs'.

For the moment the company is keeping quiet about exactly what it has in mind, refering only to 'restructuring proposals' and how they are vital if the company's UK Strip Products business is to remain in a competitive position.

Karl Koehler, Tata Steel's European CEO, said that steel demand and prices are likely to remain under pressure for years to come and that business rates in the UK are much higher than in other EU countries. He added that UK energy costs will remain uncompetitive too until new mitigation measures come into effect.

Koehler stressed that Tata Steel had invested £250 million over the last two years on state-of-the-art steelmaking technology for its strip products business and how the company is investing in its hot strip mill. "We have upgraded our galvanising line in Llanwern, enabling us to increase production of high-value automotive steels," he said, but enlarged no further on what he meant by that phrase 'equivalent to the loss of about 400 jobs'.

Clearly some job losses are on the cards as Koehler said the company would 'engage fully' with employees, trade unions 'and our political stakeholders' during the restructuring process – of which little detail has emerged.

However, Roy Rickhuss, chair of the UK trade unions' steel committee – which comprises Community, Unite and GMB – says he is concerned by the news and will do 'everything we can to support our employees through this unsettling time'.

Rickhuss' main concern is under-manning within the Strip Products business at Port Talbot. He says it was 'vital that this is not just an exercise to reduce costs by cutting jobs' and added that a 'considered and objective view' was needed in terms of the numbers required to run the plant.

Hridayeshwar Jha, director of Strip Products UK, shed some light on the planned restructuring proposals, explaining how they include a review of the steelmaker's manufacturing, engineering, technical and support functions.

It seems likely, however, that job losses are on the cards, as phrases such as providing 'our employees with as much assistance and support as possible' tend to go hand-in-hand with redundancies, but whether 400 jobs are to be axed – as a report by the has BBC suggested – is debatable.

With the threat of job losses looming large, however, Tata is bigging up past achievements in terms of job creation, claiming that over a 30-year period the company created 75,000 new jobs.

According to KPMG's head of industrial manufacturing, Stephen Cooper, the latest CIPS UK Manufacturing PMI has reported strong growth of output, new orders and jobs.

“We are on the up both in our general economy, and also in the manufacturing field. The growth in new orders has fed through to an increase in manufacturing employment. Job growth is always a highly encouraging trend and an increase in employment generally increases the spend power of consumers which normally further feeds the upward wider economic growth.”

According to Mr Cooper, the UK was matched by an upswing in manufacturing in the USA. He said that Chinese manufacturers had signalled the first improvement in overall operating conditions for six months in June, and output had risen for the first time since January.

Cooper believes there is growing optimism in the UK Manufacturing field.