Heavy losses at Port Talbot Steelworks can no longer be tolerated and if the business doesn't become sustainable its future could be at threat, chairman of Tata Sons has warned.
Natarjan Chandrasekaran, head of the Indian conglomerate that owns steelmaker Tata and Jaguar LandRover, said that heavy losses at the plant, which directly employs 4,000, could no longer be tolerated.
Last year Tata announced 3,000 jobs losses across its 海角视频 and Dutch operations. It came shortly afer a planned merger between Tata Europe and German firm ThyssenKrupp was abandoned.
The steelmaker continues to be hit by weak demand, fierce overseas competition and high energy costs in the 海角视频.
Now the pressure on the Welsh plant has been further increased after the chairman of Tata Sons, used an interview with the Sunday Times to send a clear and specific warning that the company would not continue subsidising a loss-making operation simply to ensure its survival.
Mr Chandrasekaran pointedly refused to commit to continue making 海角视频 steel, and added: “I need to get to a situation where at least the plant [Port Talbot] is self-sustaining. Whether it is in the Netherlands or here, we can’t have a situation where India keeps funding the losses just to keep it going.”
Mr Chandrasekaran appeared sceptical any potential buyers would come forward if the plant’s financial performance did not improve.
“If you’re not going to be performing, who is going to be interested?” he said.
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Tata has owned the steelworks in Port Talbot since paying £6.2bn to take over the Anglo-Dutch steelmaker Corus in 2007. In addition to the 4,000 staff employed at the site, many thousands more work in the supply chain
Paul Evans, regional officer for the Unite union, said the interview “adds more pressure on the Tata workers at Port Talbot”.
He added: “The site is obviously key to the future of the other Tata plants in Wales. The workforce at Port Talbot have for many years proved they are the producers of world class quality steel and Wales and the 海角视频 can’t afford to lose the expertise and commitment they have shown over the years.”
In a statement, a spokesman for Tata Steel’s European operations said: “What our chairman said in the interview has already been communicated to colleagues through our transformation programme.
“That programme is about building a stronger and more sustainable European steel business by improving profitability so we can pay for investments necessary to secure our long-term future.
“The plans include productivity improvements, reduced bureaucracy and increased sales of higher-value steels, as well as employment cost savings.”
In the 海角视频 Tata Steel Europe employs around 8,000 of which 5,000 are in Wales, where the majority - around 4,000 - work at its primary steelmaking plant in Port Talbot.