The Telegraph
Since 1st March, 1999
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Union holds horses on job cut buzz
- Steelworkers’ representatives want discussion with Ratan Tata first

London, Feb. 3: Britain’s steel union, Community, told The Telegraph today that it would “not give a knee-jerk reaction” to a report that jobs at Corus could not be guaranteed following the formal takeover of the Anglo-Dutch group by Tata Steel.

The UK’s Takeover Panel will supervise an extraordinary general meeting of Corus shareholders which will vote on the Tata takeover that has been recommended by the Anglo-Dutch group’s board.

Tata has already bought 21 per cent of Corus shares to prevent “last-minute mischief” though it cannot vote.

Today’s Financial Times leads with a report, “Tata warns Corus jobs cannot be guaranteed”, based on analysis of words used in an interview given by the Tata group’s 70-year-old chairman, Ratan Tata.

Corus was created by the merger of British Steel and Dutch rival Hoogovens in 1999. It employs 47,300 people worldwide, including 24,000 at Scunthorpe, Rotherham and Port Talbot in the UK.

Tata is now under pressure to do what successive British governments have failed to do — secure the long-term future of the British steel industry. At one stage, there was 17 per cent unemployment that devastated the region with steel plants.

Ratan Tata’s interview in the Financial Times is capable of more than one interpretation.

He strikes an optimistic note by saying: “Our plan would be to try to make the UK operations more profitable.”

Acknowledging that Tata Steel had come “very close” to paying its top price — Tata’s 608 pence outbid CSN’s 603 pence — Tata was frank: “We all felt that that to lose would go beyond the group and it would be an issue of great disappointment in the country. So on the one hand, you want to do the right thing by your shareholders and on the other hand, you did not want to lose.”

Ken Penton, of Community, the union which represents 80 per cent of UK steelworkers, told The Telegraph: “We want discussions with Tata about its investment strategy for Corus and have asked for a meeting. We don’t want to comment on the Financial Times article on the basis of a couple of lines which may have been taken out of context.”

One Labour MP with a unique position is Indian-born Ashok Kumar, who represents Middlesbrough South & East Cleveland and has about 500 British steelworkers among his 72,000 constituents.

Kumar, who worked for the steel industry for 16 years, said: “I am over the moon at the news about Tata. This is great news. Five years ago I would not have imagined this could happen.”

But he would now have to represent the views of British steelworkers, whom he described as possessing the best engineering skills in the world. “Understandably, there is concern about jobs,” said Kumar, whose constituency includes a plant, Skinnin Grove, which makes special sections for girders, and a blast furnace, Redcar, just outside.

Although 3,000 steelworkers are employed in the region known as Teeside, another 20,000 benefit indirectly, Kumar pointed out.

“I hope Tata will work with steelworkers to make their dream come true,” said Kumar.

To be fair to Ratan Tata, he has not said there will be job cuts. All his quotes are not included but the FT report states the following: “Mr Tata said the company had so far done only ‘paper’ due diligence on Corus and had yet to examine the steel-maker’s plants in detail. For this reason, he said he could not give any guarantee on job cuts.”

Tata’s words are: “I wouldn’t even attempt to do so because it would be wrong of me to give those assurances or to deny that that was so.”

Significantly, he stressed: “But I would say that we’re not a company that would first look at jobs.”

Penton said his union’s leaders would be happy to meet Ratan Tata himself — “we are aware of his (high) reputation” — but it was not for the union to suggest who Tata Steel would put forward for the meeting.

Penton revealed that his union’s general secretary, Michael Leahy, has already had a meeting with Philippe Varin, the highly regarded chief executive of Corus.

Following the takeover, Leahy had warned: “What we are not prepared to accept is to see the accelerated or slow demise of the UK steel industry. Tata should be under no illusions that we will resist any attempt to achieve this using all the resources at our disposal.”

Penton’s tone was more conciliatory. He said his union believed that given the current global demand for steel, the conditions were right for investment in Corus and “there was no reason to think there would be a fall in that demand”.

Another union leader, Keith Hazlewood, GMB national secretary, said he feared the bidding war had pushed the price too high.

He said: “We hope they are not going to try and recoup it back by a lack of investment in the UK and in UK jobs. That is the fear we have. There is one thing you can rest assured: if they are going to come in and start trying to cut jobs, they are going to have a fight on their hands.”

He added: “The trade unions will work with them to try and make it successful, but not at the expense of our members’ jobs.”

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