Port Talbot steelworks set to be bought by management according to reports - while unions agree pay cut ahead of sale of Tata's Scunthorpe steel plant to Greybull Capital

Tata Steel Prepares To Make Redundancies
The pay cut deal came as part of negotiations with Greybull Capital (Source: Getty)

The troubled Port Talbot steelworks may be saved as management step up with an offer.

Stuart Wilkie, managing director of Tata Strip Products UK, is reported to be leading a management buyout of the plant. Tata's decision to sell its UK operations put 4,000 jobs at Port Talbot alone at risk, and some put the total potential job loss figure for the UK at 40,000.

Last week Sanjeev Gupta, head of Liberty Steel, which has bought two of Tata's Scottish plants and is considering a bid for Tata UK, poured cold water over the idea that a management buyout was a solution for the problems at Port Talbot.

"I don't understand why someone thinks they can do what Tata couldn't," he said, speaking at a global commodities summit.

"Tata is one of the best companies in the world with all their financial firepower and they couldn't make it work."

Meanwhile, unions representing workers at Tata Steel's Scunthorpe plant have just handed their bosses a massive helping hand, voting to take a pay cut ahead of a vital sale to Greybull Capital.

In a statement today the Community, Unite and GMB unions said a ballot had decided to accept a one-year, three per cent pay cut, as well as a three per cent reduction in pension contributions.

“Our members have spoken and the trade unions will be guided by this result as we continue to work with Tata and Greybull to secure a long term future for the business," said Steve McCool nation officer for the steel industry at Community.

Read more: This one chart shows the decline and fall of the UK's steel industry

"The steel made at Scunthorpe and across the north of England is some of the best in the world and is absolutely vital to the infrastructure and construction industries."

It's the latest in a series of decisions, as Tata attempts to negotiate the sale of the plant, which was reported to have been making losses of £1m a day as cheap Chinese steel muscled British steelmakers out of the market.

Today business minister Sajid Javid said China had vowed to cut its steel output, saying the country had "recognised it is a problem of overcapacity". However, China has previously insisted it plans to keep steel exports at high levels.

Ministers have previously suggested the government may go in on the Scunthorpe steelworks, which currently employs 15,000 people.

Last week Javid said he had been in "contact with potential buyers, making clear the government stands ready to help".

"This includes looking at the possibility of co-investing with a buyer on commercial terms," he said.

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