Tata Group puts Britain’s steel industry in crisis

Nine years after acquiring Corus to become Europe’s second-largest steel maker, Tata Steel, a Tata Group company, said it plans to sell its British assets in a move that puts thousands of jobs in doubt and strikes a deep blow to Britain’s crisis-hit steel industry.

In a statement, Tata Steel said that trading conditions had “rapidly deteriorated” in Britain and Europe due to a global oversupply of steel, imports into Europe, high costs and currency volatility.

“These factors are likely to continue into the future and have significantly impacted the long term competitive position of the UK operations,” the statement read.

The company would “explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts”, it said.

Analysts attributed the development to the loan that Tata Steel took to acquire Corus as well as the “tough” environment being faced by steel firms in Europe, particularly in the UK. Tata acquired Corus, now Tata Steel Europe, in April 2007. The European behemoth was formed by a merger of British Steel and Dutch firm Koninklijke Hoogo-vens in 1999.

Union representatives had travelled to Mumbai as a company board meeting was held to try to convince Tata to invest in the plants, which employ thousands in England and Wales.

Politician Leanne Wood, leader of Welsh party Plaid Cymru, described the news as “devastating” and called for the Welsh Assembly to be recalled from its Easter break to respond to the crisis.

Tata had previously announced a series of job cuts at its Port Talbot site in Wales, where it employs 4,000 people, with another 3,000 employed as contractors and temporary workers.

The British government said it was looking at “all options” including taking a temporary stake in the country's biggest steelworks at Port Talbot to save thousands of jobs.

Unions have accused China of killing off British industry by “dumping” steel on the market at prices that cannot be competed with and criticised the government for not sending a minister to India to lobby for the plants to be kept open.