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Tata Steel prepares a major rearrangement in Europe

The only option seems to be to unbundle the company

09.May.20 6:54 PM
By Shawn Highstraw


Tata Steel prepares a major rearrangement in Europe
The steelmaker's four sites have been running at reduced power for months. NOW has been applied for in the Netherlands, a measure in which the government accounts for a substantial part of the labor costs of the nearly 10,000 employees.

In the United Kingdom, where Tata Steel has 8000 employees, 1500 employees are paid at home. This is done through a working time reduction scheme. The British branch is also applying for state aid of £ 500 million ( 565 million) from the government.

The shoe pinches there. British tax money intended for British companies is not intended to end up in the Netherlands. The Netherlands applies similar rules. In the state aid that is being rigged for KLM, efforts are being made to ensure that the Dutch contribution mainly benefits KLM, not Air France.

It is unclear whether the British government will support the British branch of Tata. The steelmaker is important for employment in Wales, where some 5,000 people work for Tata. But as in the Netherlands, support of hundreds of millions probably does not come without conditions.

The only way to prevent British tax money from ending up in the Netherlands is to disassemble the two companies, de Volkskrant concluded. It is stated that within the board and supervisory directors of Tata Steel Europe and the British and Dutch companies there is talk of an independent future of the parts.

A Dutch spokesperson for Tata Steel Europe, Ariane Volz, does not want to say anything about whether there is a preparation for an unbundling of the two companies.

The former British Steel has long been a cause for concern for Tata Europe. The British branch needs help to survive. Things are going a bit better in Netherlands, but they don't have an easy time there either. The steel industry in Wales has a dire life.

"The support to contribute to the British branch from the Netherlands has disappeared among the employees in IJmuiden," says Berghuis. A reorganization plan has been prepared whereby Tata Steel Netherlands must pay an annual dividend of 100 million euros to Tata Steel United Kingdom, the FNV director says.

A survey of FNV members who work at Tata, some 2800 employees, already showed that a large proportion of the employees are willing to take action to counter that plan.

According to Berghuis, the Indian parent company Tata Sons, which is also active in all kinds of other sectors in addition to steel, is also losing the ability to contribute. Tata has lost a lot of sales worldwide due to the corona crisis. The company wants to take its hands off the European branch and has previously stated that Tata Steel Europe must be able to keep its own pants up.

Tata Steel Europe was already preparing for a reorganization of the European steel company. In April it became clear that the reorganization will only take place after 1 July. It has also been promised that no forced redundancies will take place until October 2021.

Previously the plan was to cut 3,000 jobs in Europe, now there are about 1,250 jobs to be lost. It is unclear what exactly the reorganization will look like, but at the moment it still seems that there will be more layoffs in IJmuiden. The FNV union wants to prevent this.

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