Tata makes five-year commitment to Port Talbot and other steel facilities
Tata has assured the future of jobs at steel productions facilities at Port Talbot and other sites across the UK according to unions.
Two blast furnaces at the South Wales plant are to be kept open for at least five years and a number of other “significant” measures include keeping a commitment to avoid compulsory redundancies for a similar period, a 10-year investment plan of £1bn and consultation on replacing the pension with a defined benefit scheme.
Unions were largely positive, praising the commitments on jobs, production and investment. However, Tata’s decision to begin a consultation on the closure of the British Steel Pension Scheme to future accrual, replacing it with a defined contribution scheme with maximum contributions of 10 per cent from the company and six per cent from employees was described as “worrying”.
Unions said the new proposals represent a “significant shift” in Tata’s opening offer, which included no detailed investment plan, no jobs guarantee, no commitment to two blast furnaces and a less generous pension offer.
The future of Tata plants has been in doubt since its UK business was put up for sale in March. It subsequently sold its stake in its huge steelworks in Scunthorpe to investment firm Greybull Capital which assured the jobs of 4,400 employees.
The fate of its other facilities was left undecided, with the Unite union urging Tata to offer long-term assurances to workers in July.
Tata employs thousands of workers, including more than 4,000 at Port Talbot, and others at Trostre and Shotton in Wales, Corby, Hartlepool and other sites in the West Midlands.
Roy Rickhuss, general secretary of the Community union, said: “The past year has been incredibly difficult for steelworkers and their families. When Tata announced in March that they planned to sell the 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.
“We recognise that today’s announcement does not cover the Speciality Steels business in South Yorkshire or the SAW mills in Hartlepool. We will continue to work hard with the companies involved to secure the investment necessary to ensure those businesses grow and that our members are protected.”
Unite’s national officer, Tony Brady said: “Today’s news is a step in the right direction for our industry, but there is still a lot more that government can and must do. The Tories say they are committed to an industrial strategy, but steelworkers need more than warm words.
“The commitments made today by our reps must now be followed by a commitment from the Government that they will hold Tata to their word and ensure jobs are protected. The UK steel industry supports our whole manufacturing sector and it is vitally important that the future of that industry is secured for generations to come.”
Koushik Chatterjee, group executive director of Tata Steel and executive director for its European business, said: “The agreement between Tata Steel UK and the unions today 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.
“The proposed changes to future pension provision and other employment terms are necessary to de-risk the company and help achieve long-term sustainability. We are also working separately on a necessary structural solution for the British Steel Pension Scheme fund.”
The British steel sector was also given a further boost after British Steel announced it had won a new contract to supply rails to a Finnish company.
The company said the Finnish Transport Agency had decided to use rails made by British Steel for the sixth consecutive year.
Peter Smith, British Steel's Managing Director Rail, said: "This is an important contract for us in a very competitive market place.
"The full contract will be split 50/50 between British Steel and another supplier, with our half of the contract seeing 5,500 tonnes of steel being delivered by April 2017.
"This will be produced at our Scunthorpe Rail and Section Mill, which is now 10 years old. The first deliveries will be made to the FTA over the coming weeks and the fact they have chosen us again is testament to the high standards we set.
"This is a major exporting contract for one of our target markets and it comes as a boost against strong European competition."
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