PORT Talbot steelworkers have issued a £1.5billion SOS as they seek to rescue the iconic plant by buying it themselves – with the sales process set to start on Monday, The Sun reports. As Tata promised yesterday “reasonable time” would be given to find a buyer, The Sun can reveal that staff at the Welsh works are in talks with private investors to raise the money for a management buyout that would safeguard jobs and production.
The plan rivals a saviour bid from Indian tycoon Sanjeev Gupta, who yesterday demanded ministers slash energy costs to pave the way for his deal and described a takeover of Port Talbot as “very daunting”. It is understood to centre around reviving the “turnaround plan” rejected by Tata last week when they announced the shock sale of UK operations, and would require between £1billion and £1.5billion of investor cash to get off the ground.
The management buyout blueprint has impressed local MP Stephen Kinnock because it would retain both of Port Talbot’s blast furnaces and keep the plant producing four million tonnes of steel a year, in contrast to Mr Gupta’s plan which would convert a blast furnace and produce just one million tonnes.
Mr Kinnock told The Sun: “I think Mr Gupta’s proposals are very interesting but there is great potential in a management buyout. “It is very important that just because the Government is in a state of shambles over this we do not rush into a panic sale to the first buyer who comes along.” Last night Business Secretary Sajid Javid said the Government would “do all it can” to support “any serious buyer” following a meeting with Tata boss Cyrus Mistry in India.
He also announced the sales process will begin on Monday – though no deadline has been set, easing fears of a fire-sale by Tata as they look to dump their loss-making UK steel operations. That came as the IPPR think tank warned Britain’s economy would suffer a £7.6billion blow if a buyer cannot be found and Tata’s steelworks are forced to shut down.
The loss of 40,000 jobs would cost the Treasury £4.6billion over 10 years and reduce household spending by an extra £3billion, it said. Archbishop of Wales Dr Barry Morgan echoed Mr Gupta’s calls for sky-high energy costs to be slashed to help save British steel as he warned communities would be “crushed” if plants close.
He added: “If the banking industry, which still does not fully appreciate the extent of its rescue, judging by the behaviour of some of its members, was deemed worth saving, surely it is worth securing a sustainable future for the steel industry in Wales and the UK.” In a sign of the sacrifices that could be needed to save Port Talbot, union members at a Tata plant in Scunthorpe are being balloted over a three per cent pay cut and reduced pensions to wave through a takeover by investment firm Greybull Capital.
The deal has been in the pipeline for months and is unrelated to last week’s Tata sell-off announcement. Meanwhile the GMB union demanded a probe into a separate part of Tata over alleged visa abuse for foreign workers. National officer Mick Rix wrote to the Home Affairs Select Committee calling on it to investigate Tata Consultancy Services’ use of visas which allow firms to swap staff between countries.
He claimed Tata was using the visas to import cheap Indian workers to Heathrow as part of a British Airways outsourcing deal that will cost 800 jobs.