UNIONS today raised concerns over jobs, including around 350 in Scotland, after steel giant Tata said it was planning to sell its “long products” division, which supplies industries including rail and construction.
The Indian group said it had signed a memorandum of understanding with the Geneva-based industrial conglomerate Klesch Group for the sale of UK sites including mills at Dalzell in Motherwell and Clydebridge in Cambuslang, and distribution sites in Dundee, Edinburgh and Mosstodloch in Moray and mills in Scunthorpe and Workington. The sale would also include a rail consultancy in York as well as other operations in France and Germany.
About 6,500 people are employed at the long products business and its distribution facilities across the UK.
Unions said they were disappointed with the way the announcement had been handled and were seeking talks to discuss any impact on jobs.
Karl Koehler, chief executive of Tata Steel’s European operations, said the company had decided to concentrate its resources on steel strip products.
“We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that.”
Koehler said while negotiations continue with Klesch it will engage with employees and consult trade union representatives and works councils. But in a joint statement, the Community, Unite and GMB unions said they had been treated with contempt by Tata.
“The level of consultation that we would expect ahead of such a major strategic announcement has not taken place. We were made aware of this fait accompli two days ago, which is neither within the spirit nor the letter of long-standing agreements.”
They said the move could have “serious consequences” for employees and contractors.
“We want Tata Steel to take a step back and carry out the consultation with its unions, which it should have been doing in recent months when it was preparing to sell its assets.” The unions also called on the UK government to intervene in the public interest.
Tom Greatrex, MP for Rutherglen and Hamilton West, home to the Clydebridge site, said the news was a “huge concern” for Scottish workers.
“Along with my colleague and MP for the Dalzell works, Frank Roy, I have demanded that Tata Steel’s senior management meet the trade unions, workers and MPs from affected constituencies so that the many questions and concerns which arise from this announcement can be raised. The failure to consult beforehand has heightened fears that this move will put an historic and strategically important industry in Scotland at risk.”
Warwick Business School assistant professor of marketing Sourindra Banerjee who specialises in Indian conglomerates said the decision was in line with Tata’s strategy to “move up the value chain”.
The Klesch Group is a global industrial commodities business, with three divisions specialising in the production and trading of chemicals, metals and oil.