Hundreds of Black Country jobs secure after Tata Steel agrees investment deal

HUNDREDS of jobs in the Black Country steel industry look to be more secure this morning following a new investment pledge by Tata Steel UK.

The Indian-owned business has reached an agreement with trade unions on a number of proposals that would structurally reduce risks and help secure a more sustainable future for its UK business.

The company employs more than 600 people in the Black Country – 450 alone at its plant in Wednesfield – and there had been fears many of these could be lost when the company announced earlier this year its intention to sell the business.

However, the investment deal is not without compromises.

Tata Steel bosses will next week start a consultation with its employees on a proposal to close the British Steel Pension Scheme to future accrual. Employees would be offered a competitive defined contribution scheme.

The proposal on pensions and other changes in the employment terms are part of the ongoing transformation plan that the business is undertaking. As part of the latest agreement all parties will work towards making Tata Steel UK a more sustainable business.

The company and trade unions have also agreed on the principle that subject to the structural de-risking and de-linking of the British Steel Pension Scheme fund from the business, Tata Steel UK will continue the existing blast furnace configuration in Port Talbot until 2021.

In addition, based on achieving the necessary financial performance and cash flows as per the transformation plan of the UK business, the company will continue to invest across the UK sites to enhance the competitive position of Tata Steel UK in the European steel industry.

The company has also offered an employment pact until 2021 which supports employees through future changes by investing in their skills to support further plant upgrades, automation and other digital initiatives.

Koushik Chatterjee, Group Executive Director Tata Steel and Executive Director for its European business said: “The agreement between Tata Steel UK and the unions marks an important step forward in the journey to develop a sustainable future for our UK steel business. These are unprecedented times for the steel industry globally with multiple risks including global economic uncertainty, slow manufacturing growth and currency volatility which continues to present significant challenges to the business.

“The delivery of Tata Steel UK’s transformation plan and generation of free cash flows will be the key enabler for the future sustainability of the business and we are very encouraged by the early signs of the delivery of the plan.

“There is much more work to be done to make Tata Steel UK more financially sustainable, but I am confident that all stakeholders will do all they can to try to ensure that the company will be able to achieve its plan in the coming months and years.”

Roy Rickhuss, of steel union Community, said: “The past year has been incredibly difficult for steelworkers and their families. When Tata announced in March that they planned to sell the (Port Talbot) steelworks, no one knew if they would have a job by Christmas. This proposal would secure jobs for years to come and bring serious investment not just to Port Talbot but to steelworks across the UK.

“Reaching this stage of the process is a credit to the hard work of our members who never gave up the fight to ‘Save Our Steel’ – it was their jobs on the line and it has been their campaign that has brought Tata to this position.

“This is not the end of the process and it will be for all our members to now vote on this proposal. We will continue to work closely with Tata and all levels of government as we seek to build a sustainable future for Britain’s steel industry.”

He said the union recognised that the announcement did not cover the Speciality Steels business in South Yorkshire or the SAW mills in Hartlepool, but added that it would continue to work hard with the companies involved to secure the investment necessary to ensure the businesses were protected.