Tata Steel: deal in the offing?

As private equity firm Greybull Capital may be set to take control of Tata Steel’s Long Products division in Scunthorpe in April as part of a £400m deal to rescue the operation, steel unions have begun negotiating cost saving measures for the takeover to go through.

Tata Steel has already imposed a pay freeze on 4,000 of its workers in Scunthorpe for 2016-2017. Quarterly and annual bonus deals that had been negotiated in 1980 are also now being dropped, with profit-related bonuses to replace these from January 1 of this year.

Pensions, too, may be deferred, meaning that workers may have to work beyond the pensionable age of 55.

Unite Tata Steel site convenor Martin Foster said that negotiations on any further cost saving measures are currently underway, with more meetings scheduled either this week or next.

“The negotiations are very difficult,” Foster said, noting that details are at the moment confidential. “But we’re hoping to soon reach an agreement that we’ll be able to put forward to our members for a vote.”

Members decide

“In the end,” Foster emphasised, “it is our members who will decide if the agreement is acceptable.”

Foster urged members who may be concerned about the future takeover to “watch and wait.”

“We are very certain that if Greybull does eventually sign on the dotted line, there will be a good and long future for the Long Products division.”

Tata Steel’s Long Products division employs nearly 5,000 people across Europe and produces steel products such as universal beams, universal columns, parallel flange channels and angles used in construction.

Greybull Capital took over the ailing airline Monarch last year and has since turned it around to begin producing profit.

Foster noted that pressure on the government must continue in earnest, for both the future prospects of Scunthorpe as well as steel communities across the UK.

“No matter what happens with the potential Greybull takeover, long-term future success is still dependent on the UK government stepping in and taking action urgently,” Foster explained. “We cannot let up in our campaign for the sort of intervention that governments in both Europe and the US have already embraced to support their domestic steel industries.”

As steel unions seek to negotiate a deal so that Greybull Capital will step in to invest in the Long Products division, just last week unions and steel bosses joined together in Brussels in a demo to save the steel industry.

“It was the first time bosses have stood side by side with employees to demand action on steel and it truly shows the strength of feeling over what is happening,” said Unite national officer Harish Patel, who attended the march.

Stay tuned on UNITElive for the latest on the potential Greybull takeover as well as updates on the steel industry.