India’s Tata steel is in talks with billionaire Gary Klesch to sell off Scunthorpe long steel products after hiving off a division that employs thousands of workers.
The sale was announced along with the sale of several other UK sites including Clydebridge in Scotland and Dalzell Teeside, after the plant made a loss the previous year due to long product steel being down in the global market.
Trade unions, unite and GMB, representing Scunthorpe steel workers have said Tata steel had failed to consult them prior to announcement. In a joint statement they said: “The fact that Tata Steel wants to abandon half of its European operations and pull out of an entire strategic market does not bode well for the future and ends Tata Steel’s vision to be a global steel player.”
Many workers worry about the future of their jobs as the announced sale could lead to an eventual closure of the plant.
Klesch Group are in talks with tata steel about purchasing the site, rumoured at low price.
Many worry that Klesch Group may strip the assets and sell the site to turn a profit. In response to this Klesch said “I am not going into Scunthorpe to asset strip. I have never asset stripped in my life and would not know where to start.”
“We will come to Scunthorpe as a standalone operation without the services used by Tata Steel, so we will have to employ an evaluation team of between 125 and 150 people to go on site. “I am well aware capital investment has to be made on the Scunthorpe site but that is all part of the due diligence process.”
However others are not so confident, Mr Greatrex asked Prime Minister David Cameron whether the bid to buy Clydebridge by Klesch Group, “with its record of asset stripping in France and Holland”, is “in the public and national interest”.
The announcement comes at a bad time for Scunthorpe, an area already suffering the effects of the austerity and heavily dependant on the steel industry.