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Steel industry still in crisis, warn workers as Tata posts loss

Published 12/09/2016

Tata was stung by losses linked to discontinued operations, including its UK businesses
Tata was stung by losses linked to discontinued operations, including its UK businesses

Steelworkers have warned of a continuing crisis in their industry as Indian giant Tata slumped to a net loss of 31.8 billion rupees (£358 million) for the quarter to June amid continued uncertainty over its UK operations.

The first-quarter results were published in Mumbai just before a passionate debate at the TUC Congress in Brighton attended by steelworkers from across the country.

The conference "deplored the neglect" of the Government over the threat to jobs and vowed to step up efforts to safeguard plants such as Port Talbot in South Wales.

GMB member Ian Kemp, who works at the Tata plant in Rotherham, wore his bright yellow and blue works jacket as he told delegates: "I have never seen the industry in such a crisis. We have lost jobs, had plants sold off and on/off plans to sell the rest. It is no wonder morale is so low."

In a message to Tata, he said: "You might want to dress me like a minion, but you will not treat me like one."

Roy Rickhuss, general secretary of the Community union, said: "We will not let the sun set on our industry or let steel communities be forgotten. We will not let employers use this crisis to attack our members. Tata needs to honour its moral and social obligations - they need to guarantee a future."

The Indian conglomerate was stung by losses linked to discontinued operations, including its UK businesses, saying that liquid steel production in Europe fell by 15.7% compared with the same period last year.

Tata sold its European long products division based in Lincolnshire to Greybull Capital during the quarter for a nominal sum.

It still owns Port Talbot, which employs more than 4,000 workers, and thousands more at other plants in Shotton, Hartlepool, Rotherham and Stocksbridge.

After deciding to sell its remaining UK business, Tata announced in July that it was putting that process on hold while it pursued a European tie-up.

One of the biggest stumbling blocks has been the legacy of the British steel pension fund that Tata inherited when it bought the business in 2007.

Tata said talks about the pension deficit were continuing with all relevant parties including the UK Government, trustees and unions.

Koushik Chatterjee, Tata's group executive director, said: "In Europe, the positive impact of the structural restructuring undertaken in the UK in the last six months along with a weaker pound, cost reduction measures and an effective hedging strategy on raw material imports have enabled the business to report better performance for the quarter.

"With the completion of the Long Products Europe divestment, Tata Steel Europe will focus on being a premium strip player and the management and employees of Tata Steel Europe continues to strive to structurally improve the business performance. The strategy for exploring further strategic consolidation in Europe is a step in that direction. Tata Steel UK also continues to be engaged with several stakeholders including unions, the Trustee and the UK Government to find a structural solution to the pension exposure of the UK business."

The TUC conference agreed a motion accusing the Government of "warm words" but little in terms of tangible results for the steel industry.

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