The decision of Tata steel to ‘pause’ its search for a
new buyer for the Trostre works and its other plants is a worry.
To keep Port Talbot and the other plants running for
more than a year or so will require a company with deep pockets - and the
willingness to dip into them.
When I met the Chief Executive of Tata in the UK a few
weeks ago he told me that he was not convinced that any of the bidders who had
come forward had the ability to keep the plants open for more than a few years.
Tata proudly see themselves as responsible owners (and
to be fair they put essential investment into Trostre) and they want to make
their sure they are seen as responsible sellers. They don’t want to be
seen in the same way as Sir Phillip Green who cut and run after selling BHS.
Tata clearly didn’t think any of the bidders were
serious, and with companies finding it harder to find investment in the
aftermath of the EU referendum they’ve decided to put a stop to the sale
But some sceptics think Tata had no intention of
selling to a company that would be their rival in any event. The fear is that
the announcement that they will instead explore a merger with the German
steel-maker ThyssenKrupp will allow them to wind-down Port Talbot over the next
couple of years as they intended all along.
A tie-up with ThyssenKrupp could lead to a
consolidation of steel production at Tata’s Dutch plant at Ijmuiden, and once
that is secure Port Talbot could be closed to take out excess production
capacity from the system.
For some reason the Welsh Secretary Alun Cairns has
welcomed this merger.
We need to look carefully to see if there’s anything
that can be done to secure the future of the Welsh plants.
The Welsh Government has put money on the table with a
clear offer of help. The UK Government have yet to make a concrete offer of
support and they must now stop talking and start delivering