Steelmaker Tata Steel Ltd's Managing Director and Chief Executive Officer TV Narendran said on August 1 that around 1,700 employees of the company's United Kingdom operations, chiefly at its Port Talbot facility in Wales, have opted for the voluntary redundancy scheme. The scheme was opened in July after months of negotiations with trade unions and closes on August 7.
"...Whoever doesn't take voluntary redundancy, and if there are jobs which are not there subsequent to closure, then that becomes a compulsory redundancy. Obviously, everyone wants compulsory redundancy to be as low as possible. Whatever is at number then, the question is how to reskill them. The government is also willing to put in some money to reskill them. There are sometimes jobs available, but different skillsets are required. That conversation happens once you know where the number (of voluntary redundancies) is," Narendran told Moneycontrol in an interaction.
Around 2,600 employees are expected to be laid off as Tata Steel is in the process of closing "heavy-end" assets at Port Talbot, having already closed the coke oven, and one of the two blast furnaces at the site. The second blast furnace is scheduled for closure in September, after which the company will start setting up electric arc furnaces at the site.
Around 5,000 people will continue to work for Tata Steel UK, primarily in the company's downstream operations, such as tubes, construction steels, and others, as well as in marketing and sales functions.
Narendran said that the company's scope in current talks with the new UK government, led by prime minister Keir Starmer, is largely around potential further investments in the country beyond the 1.25 billion pound restructuring plan that the two parties have agreed upon, especially in downstream and allied operations. The UK government has agreed to provide a grant of 500 million pounds towards restructuring costs.
While Starmer's Labour Party has promised extensive government support for the UK steel industry, the party had previously opposed the layoffs in Port Talbot, citing the deep ties of the local community to the steel industry, and the potential adverse effects it may have on the local economy.
Tata Steel has indicated that it is in talks with the UK government for the release of its pledged 500 million pounds, although it does not expect the talks to be confrontational in nature.
"I think actually everyone understands the challenges of this transition. The approach is more collaborative, in working together to find a solution which works for everyone rather than a hard nosed negotiations. I think the government has been very supportive and collaborative," Narendran said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
