Tata Steel Europe, which is restructuring its loss-making long products business, has said it is hopeful of convincing 1,200 workers at its Scunthorpe facility in the UK, to go in for voluntary layoff. The firm said the entire process of consultations with workers would take another 6-8 weeks. The company is said to be in face-to-face talks with 4,000 employees in Scunthorpe as part of its plans to do away with 1,200 jobs.
Talking exclusively to FE, Karl-Ulrich Kohler, MD and CEO of Tata Steel?s European operations, said, ?We are talking to people and are working hard to avoid any forceful redundancies, and we hope to come to conclusion in the next 6-8 weeks.?
Facing a severe import threat from countries such as Ukraine and China, and also hit by decline in some major markets, particularly the construction sector, Tata Steel is planning to target high-value markets and introduce greater flexibility into its costs and operations. In an effort to further reduce costs, Tata Steel Europe has proposed to close or mothball parts of the Scunthorpe plant and puts at risk 1,200 jobs at the plant and 300 jobs at its Teesside unit.
When asked whether the company is offering attractive packages for the workers for voluntary redundancies, Kohler said, ?We keep it within the framework of our usual way of dealing with these things and also there is a legal framework.?
To support its strategy, the company plans to invest ?400 million into its long product division over a period of five-years to help it turn around. Demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to fully recover within the next five years.
Kohler further revealed that the company plans to invest more than ?400 million in Europe in the current financial year 2012 and will not close down any units in Europe further. ?We are not closing any piece of our capacity. Our capacity is invested and we want to utilise it. What is hampering us is the market ? issues with the long product business and the EU Emission norms,? Kohler said.