Unions are worried that Tata Steel's units in UK may be closed down to get a EU nod for JV with thyssenkrupp
Representatives of Tata Steel's workers’ unions met Chairman N Chandrasekaran in Mumbai earlier this week, seeking assurances on job security in the company's units in Europe.
The visit follows apprehensions about the proposed JV between Tata Steel's European operations and thyssenkrupp, favouring the German conglomerate. The workers and the union worry that Tata Steel UK's units may be closed down, leading to loss of jobs.
The JV is presently under investigation by the European Union Commission, which is checking if the venture will hurt competition in some of the key segments of the steel sector in Europe.
The two partners have submitted a proposal that includes “concessions” and the commission is expected to come to a decision by June 5.
Sources said that representatives of European Works Council and Community were a part of the delegation that met Chandrasekaran.
"The unions are unhappy that both Tata Steel Europe and thyssenkrupp presented the remedies to the Commission without consulting them. All European unions have legal rights to be consulted for anything that impacts the workers," said an executive.
"But they had no opportunity to say if the remedies suggested are good or not," added the executive.
Another official added: "It is a concern that is shared by the UK government and the trade unions."
The JV, which was finalised in 2018, will create Europe's second largest steelmaker after ArcelorMittal. It will have annual revenues of 17 billion euros and will produce 21 million tons of steel a year.
In a statement earlier this month, the Works Council said: “The EWC will continue to support the joint venture only if we consider it to be in the best interests of the workforce at all our sites. Due to these recent developments, we are now unconvinced the joint venture is the best option for Tata Steel Europe."
The commission had identified three industry segments - automotive steel, coated steel used for packaging and electrical steel - where the JV may harm competition.
Tata Steel and thyssenkrupp are believed to have offered to sell plants in Spain, Belgium and the UK. The UK facilities could include units that make electrical steel and packing steel.
Despite the unions’ reservations, Tata Steel executives say that the company may not have much of a choice but to adhere to what the commission says. "There is really no question. Even before, other companies have been asked to do the same," said a senior executive.
In 2018, ArcelorMittal had to sell some of its assets to get the commission's nod for its acquisition of Italy's Ilva.
thyssenkrupp concerns
Even as the Tata Steel management tries to calm the workers’ nerves, its partner is facing challenges of its own as a senior Tata Steel executive calls it "a much more serious challenge."
On April 24, Reuters reported that thyssenkrupp’s supervisory board plans "stress-test the viability of Chief Executive Guido Kerkhoff’s plans to break up the steel-to-submarines conglomerate given changed market conditions."
The report added: “Although the supervisory backed Kerkhoff’s plan when he announced it last year, the board headed by Martina Merz has quietly begun questioning the benefits. The board might call Kerkhoff for a meeting in May to explain his plans.”
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