The latest on the sale of Tata Steel’s UK operations is that job cuts cannot be ruled out – according to Tata Steel group executive Koushik Chatterjee.
Tata Steel has reportedly halted the sale of its UK business in order to engage with German steelmaker ThyssenKrupp about a possible joint venture involving the UK operations.
ThyssenKrupp has confirmed that discussions with the Indian steel giant have taken place, according to a report in the Wall Street Journal.
It is argued that a joint venture deal between Tata Steel and the German steel giant would kick off ‘a flurry of merger-and-acquisition activity to cope with a protracted steel-capacity glut and a wave of inexpensive steel imports from countries such as China…’.
The big sticking point is the Tata Steel UK pension plan, which reportedly has a deficit of £700 million. There is also ‘Brexit’ to consider. Now that the UK has voted to leave the EU, Tata Steel has been forced to assess the impact of that decision on its future business plans in the UK.
Anna Soubry, a British Government Business Minister, claims that uncertainty surrounding the future of the Port Talbot plant after "Brexit" will not mean plant closure. Speaking of the good relationship that exists between the Government and the Indian steelmaker, Ms Soubry – who voted to remain in the EU – said that there was no cause to be pessimistic. She did, however, disagree with Government ministers who believe that Tata Steel UK will thrive outside of Europe.
The future of Tata’s UK operations is still uncertain. Jobs are at risk even if the ThyssenKrupp joint venture goes through, according to Chatterjee.