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As part of the British metal working industry, here at Qualitetch, we have been concerned about the news story that has been all over our TVs, radios and newspapers for the last few weeks.
The future of Tata Steel UK Operations has been up in the air, but with talks in place with potential buyers for the most at risk sites in Port Talbot, Scunthorpe and Rotherham, the future could be looking much brighter.
It has been reported that after investing £3 billion in the UK plants, the company was losing approximately £1 million every day. However, the hunt for a buyer for the UK steel plants over the last 18 months looks set to come to fruition very soon. (Source: http://www.bbc.co.uk/news/business-35973613)
So, what does this mean for the 15,000 employees in the UK plants, spread across three locations in Port Talbot, Scunthorpe, and Rotherham, along with other manufacturing lines? There have been a number of options available to the company.
The multi-national Indian steelmaking company was the 11th largest steel producing company in the world as of 2013, with plants across the world in industry-heavy countries like the UK, Singapore, Australia and India.
In the News
There are three main solutions available to Tata Steel currently: find a buyer, nationalisation, and the last resort of plant closure.
To entirely restructure the Tata Steel plants in the UK, they need an investor or buyer that can put up, at least, £2 billion. Plants in Scotland have been saved by Liberty House in conjunction with the Scottish Government; a deal is being worked on to rescue Scunthorpe, but until recently, the future of Port Talbot is very much up in the air.
With over 5,000 jobs at stake, the closure could prove extremely damaging to the local community. Fortunately, sales negotiations that have taken place in the last few days are thought to be very positive with a sale likely in the near future.
While nationalisation has been touted as a viable option, it is one that Prime Minister David Cameron states is not the right solution for the long term stability of the employees at Tata Steel UK.
Vital to the Economy
While China’s share of the steel industry has sky-rocketed over the last 25 years, there are still approximately 15,000 people employed in the UK steel industry, making it a vital part of the British economy, especially in traditionally industrial towns and cities such as those where Tata Steel are based.
Worryingly, recent reports by the IPPR Think Tank suggest that a Tata Steel UK collapse would not only threaten the 15,000 employed by the company, but up to 25,000 other jobs throughout the supply chain could also be at risk. This would be devastating for the UK and others throughout Europe.
Fortunately, this no longer appears to be the case and a sale of the UK plants looks set to be imminent. Workers that have been worried about the future will be pleased to hear this positive news. To date, there have been no buyers mentioned by name, but indications are that Liberty House and owner Sanjeev Gupta are likely to be involved.
Here at Qualitetch, we are certainly hoping for a positive outcome for the workers of Tata Steel UK, and for the UK steel industry as a whole.
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