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  1. ITV Report

Tata Steel merger 'could mean thousands of job losses'

Steel giant Tata has taken a big step to merging with German firm Thyssenkrupp in a move which could lead to thousands of job losses.

A memorandum of understanding has been signed although the tie-up will not be completed for another year.

Credit: PA Images

Hans Fisher, chief executive of Tata Steel Europe, said there would be potential job losses of 2,000, split between the two companies, although parts of the business could be sold once the deal is finalised, leading to more jobs leaving the company.

The jobs initially affected will be in sales and marketing, where the two companies see the best opportunities to make savings.

Unions gave a cautious welcome to the merger announcement but warned they would fight any compulsory redundancies.

Merger talks started around 18 months ago after Tata decided not to sell its UK steel business, but were held up as the Indian conglomerate sought approval from workers for pension changes.

The companies employ around 48,000 workers, with Tata owning UK plants including Port Talbot in South Wales, which employs 4,000.

Business Secretary Greg Clark said the announcement was an "important step" for the steel industry, adding:

"Today's agreement between Tata Steel and Thyssenkrupp is an important next step in establishing their shared ambition for Port Talbot as a world-class steel manufacturer, with a focus on quality, technology and innovation."

Roy Rickhuss, general secretary of Community and chairman of the co-ordinating committee representing the Unite, GMB and Community, said unions recognised the industrial logic of the partnership.

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

As a priority, we will be pressing Tata to demonstrate their long term commitment to steel making in the UK by confirming they will invest in the reline of Port Talbot's Blast Furnace No.5.

We must also be assured that Thyssenkrupp's pension liabilities will be ringfenced with a cast-iron guarantee that UK steelworkers will never fund German pensions."

– Roy Rickhuss, General Secretary of Community

Mr Rickhuss added that unions have been assured there will be no asset closures or reductions in production capacities across the UK.

He said: "While a merger of this size will inevitably mean a review of support functions such as HR and IT, the vast majority of these roles are no longer located in the UK.

"If the company does seek to implement compulsory redundancies we will fight that using every necessary means."

Labour MP for Aberavon, Stephen Kinnock, says Port Talbot has already 'done its bit' if today's Tata merger brings future jobs cuts.

We cautiously welcome the announcement, recognising the opportunities for the UK operations from the creation of Europe’s second largest steel company, and the commitment to continue the present network configuration of the three hubs including Port Talbot.

Both I and the First Minister have spoken with Tata Steel UK CEO Bimlendra Jha about the announcement of the joint venture.

Welsh Government remains fully committed to all that we can to secure a sustainable future for the steel industry.

Clearly we will now need to gain a more detailed understanding of the process ahead and the implications for Welsh operations and we will be seeking further detail from Tata Steel and Thyssenkrupp.

At the same time we will reiterate our expectation regarding continued investment in Welsh operations and the safeguarding of jobs.

– Ken Skates, Welsh Government Economy and Infrastructure Secretary