Tata Steel Greybull deal: What it means to Scunthorpe and English Steel Industry

The WEU would like to applaud the hard work that ‘Community’ the Trade Union involved in saving Scunthorpe Steel works. We hope the conditions of the deal are met and finalised as the £400 million deal could save up to 4,000 jobs at the town’s plant.

A new dawn for Scunthorpe steelworks.

By Scunthorpe Telegraph  |  Posted: April 11, 2016

Tata Steel Greybull deal: What it means to Scunthorpe

Tata Steel and Greybull Capital today signed an agreement to buy the Scunthorpe works.

The agreement ended two years of uncertainty and frustration for thousands of steelworkers in the town.

Greybull’s £400 million rescue package for the loss-making 2,000-acre site include rebranding the business as British Steel – a name last seen in Scunthorpe in 1988.

But there remain a number of conditions before a deal is finally clinched.

They include transfer of contracts, certain government approvals and the satisfactory completion of financing arrangements.

A proposed pay cut – upon which workers are currently being balloted – along with reductions in contributions by employees and employers to the pension fund, is aimed at saving £9 million in the first year.

The pay move comes after employees agreed to a one-year pay freeze, an end to non-profit related bonuses and the scrapping of their final salary pension scheme.

Paying tribute to the employees, Bimlendra Jha, chief executive of Tata’s Long Products Europe business, said: “Today marks a significant milestone in the sale of the Long Products Europe business.

“This sale is the best possible outcome for employees who have worked relentlessly to ensure the business’s survival, and helped to make it attractive to a potential buyer.”

Marc Meyohas, one of three partners in Greybull, said: “We are delighted to have reached agreement for the acquisition of Long Products which we believe can become a strong business, with a highly skilled workforce and great potential.

“I would personally like to thank Tata Steel, the trade unions and the British and French Governments for their support, which was essential in ensuring the agreement. We are now focused on taking the deal to completion in order that the business can start its next chapter with confidence”.

Roy Rickhuss, general secretary of the town’s main steel union Community, said: “We welcome this major step forward towards a deal which will continue steel making in Scunthorpe and secure the future of the Long Products business across the UK.

“Greybull’s interest in the business is testament to the skills, experience and commitment of UK steelworkers and demonstrates that with the right investors, UK steel making can have a positive future. So far, Tata Steel has honoured its commitment to be a responsible seller of the business by allowing time for the deal to be done.

“There are still crucial steps to be taken to complete the deal and all parties involved need to retain their focus towards achieving the objective of securing the future of Long Products.

“Community’s independent experts, Syndex, have assessed that the transformation plan for the business is robust and Greybull has the necessary capabilities to build a sustainable business.

“The deal alone will be a huge boost to the UK steel industry, but more Government action to support our industry will be needed to ensure its sustainable long-term future.

“I want to pay tribute to Community’s local reps and their tireless efforts throughout this process so far. Our members are still voting on temporary changes to terms and conditions that are the result of negotiations in difficult circumstances, but should our members vote to accept the changes, they will represent a significant contribution by the workforce towards turning the business around and giving it the best possible chance of success under new ownership.”

Martin Foster, Scunthorpe convenor for the rival union Unite, said: “This announcement is good news and brings us within touching distance of securing a future for steelmaking in Scunthorpe.

“It should not be forgotten though that many workers have already lost their jobs at Scunthorpe and those that remain are making huge sacrifices with their pay and pensions to secure their jobs.

“Unite is asking our members to back the deal, but government ministers must now play their part too.

“The government cannot now leave Scunthorpe’s steelworkers high and dry and must take decisive action to allow them to compete on an even playing field with their global competitors.

“This means supporting steelworkers by ensuring infrastructure such as HS2 and defence projects are built with British steel, as well as tackling the dumping of cheap imports and high energy costs, which is leaving steelworkers fighting with one hand tied behind their backs.”