Constructive union talks for prospective owner of steel plant
4 January 2016
The prospective new owner of Tata Steel’s long products unit has said it has had constructive talks with trade unions, as it looks to put in place a turn around plan at the loss-making unit.
Investment firm Greybull Capital is currently in exclusive talks with Tata to buy the Scunthorpe plant.
Tata, Britain’s largest steelmaker, has been trying to sell its long products unit, which makes steel for use in construction, since 2014.
Turnaround specialist Greybull is said to want to scrap the final-salary pension scheme and also introduce changes to overtime pay and bonuses.
This could potentially be a stumbling block for the deal, which according to one source is probably worth less than £500m, with the buyer not likely to take on any debt.
A spokesman for Greybull said: “The long products business has been significantly loss making. To ensure a viable future for the company and all involved, there will by default need to be some changes implemented.
“The trade unions involved are aware of the difficult situation and have to date been most constructive. As possibly the most important stakeholders, their strong support is paramount for the transaction to succeed and for the company to regain its competitiveness.”
British steelmakers pay some of the highest energy costs and green taxes in the world and are also struggling to compete with record Chinese steel imports, which they say have been unfairly subsidised by the government.