UK seeks assurances over the future of Port Talbot after Tata Steel merger with Thyssenkrupp

Courtney Goldsmith
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Tata Steel Expected To Cut A Thousand Jobs In Wales
4,000 jobs will be cut across the two businesses (Source: Getty)

UK unions and politicians sought assurances over jobs and investments after Tata Steel and Germany's Thyssenkrupp announced an agreement to combine their European operations in a joint venture.

The firms announced the tie-up would involve the loss of around 4,000 jobs shared between the two businesses. Almost 7,000 people are employed by Tata Steel in Wales, including more than 4,000 at Britain's largest steelworks at Port Talbot.

Stephen Kinnock, MP for Aberavon, where Port Talbot is located, said the jobs were unlikely to be taken from there.

"The fact of matter is we’ve been through huge and very painful restructuring here. The Port Talbot workforce is lean and mean and fighting fit. I don’t see where any further cuts could come here at Port Talbot," Kinnock told City A.M.

"I can’t speak for what happens in Germany and the Netherlands, but they haven’t been through anything like pain we’ve been through here. For any job losses as result of the joint venture, the Germans and Dutch should step up to plate," he added.

Read more: Tata and unions agree to rescue plan for the Port Talbot steel works

Kinnock cautiously welcomed the news. "The big questions is whether these words will be backed up with real investment."

He said Tata must also confirm it will still invest in relining Port Talbot's blast furnace number five, which he said would "secure the future of primary steelmaking in the UK for decades to come".

Roy Rickhuss, general secretary of the union Community and chair of the National Trade Union Steel Co-ordinating Committee, echoed that in a statement.

“As always, the devil will be in the detail and we are seeking further assurances on jobs, investment and future production across the UK operations.

“We are now seeking an urgent meeting with Tata to fully understand their intentions for the UK in the context of the joint venture. We are also making arrangements to bring together senior representatives from across the UK to determine our approach to this significant new development."

He added:

We have been assured there will be no asset closures or reductions in production capacities across the UK. If the company does seek to implement compulsory redundancies we will fight that using every necessary means.

The GMB union added all Tata union representatives were planning to meet at Port Talbot next week where they hope to receive reassurances from Tata representatives about the facility's future.

Meanwhile, German labour minister Andrea Nahles said a merger should not come "at any price", adding: "The sites in Germany must be maintained and compulsory redundancies must be ruled out."

German economy minister Brigitte Zypries added that employees were not yet convinced about the merger and were very concerned about job losses.

Philip Barker, partner and head of industrials at Cavendish Corporate Finance, said the merger, which will create the second largest steelmaker in Europe, secures jobs and safeguards the future of Port Talbot. "It also marks an opportunity for workers and manufactures to embrace growth through innovation and sustainability," he said.

Barker added that the merger was a step in the right direction for protecting UK steelworkers who have faced uncertainty over the past few years.

Analysts at Jefferies said: "We believe Thyssenkrupp's medium-term goal is to completely spin-out steel ops, leaving Thyssenkrupp as a near pure-play cap goods business, and today's proposed merger structure is attractively 'IPO-able', in our view."

Read more: Tata Steel and Thyssenkrupp agree steel deal but warn of job cuts

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