A Tata Steel group executive director has said job cuts cannot be ruled out after the sale of the UK business was put on hold.
In an interview with Channel 4 News Koushik Chatterjee, Tata Steel’s group executive finance director said “there can’t be guarantees” and compared the situation to when Tata laid off thousands of people in India in the 1990s.
In India in 1995 we faced a similar situation. 80,000 people were the employees of Tata Steel in a country with no social security. We had to take 40,000 people out over five years. That’s the vulnerability of steel business.
Late last week Tata Steel said it had halted the sale of its biggest UK assets as it entered talks with German rival Thyssenkrupp for a joint venture, which are still in an early stage. The success of the talks will depend on finding a suitable outcome for the burdensome Tata pension fund which has a deficit of £700m.
Tata decided to look at an alternative after weighing up seven expressions of interest it received for its UK operatons, as well as the impact of the UK vote to quit the European Union and the British Steel pension fund.
When asked if he could promise the UK business would not be put into insolvancy next year Chatterjee said:
No I cannot give that promise because of the fact that we have to make this business more sustainable. This is not about a promise or a guarantee from anybody.
We are in a free market business enterprise and we will have to face the headwinds and the market and yet find the ways to mitigate those challenges.