Tensions grow between Tata UK and IJmuiden

The divide between Tata Steel's UK and European businesses is becoming increasingly clear, with Tata Steel Netherlands' central works council (CWC) today lambasting the dismissal of chairman Theo Henrar, and the parent company's commitment to the loss-making UK business.

"The CWC will no longer co-operate in the plans of the [executive committee], the sole purpose of which is to keep Tata Steel UK, a business that has been loss-making for more than 20 years, afloat," the CWC said.

The council said the decision to dismiss Henrar was ill-considered, and that it does not agree with the decision to shed 1,000 jobs in the Netherlands — something it sees as partially caused by the weakness of Tata's UK arm.

Reports have emerged that Tata Steel is looking to demerge its UK and European operations, but the company said this is based on inaccurate assumptions.

"We recognise the uncertainties caused by this unprecedented pandemic. But we are one company and we believe in the value created for our customers by the combination of our businesses," a spokesperson said.

Talk of the demerger increased speculation about the fate of the company's beleaguered UK operation, which is in talks with the government about financial aid as it faces up to coronavirus-related flat steel demand destruction.

Tata tried to offload its UK business, centred at Port Talbot and Llanwern in Wales, in 2016, before committing to a failed joint venture with ThyssenKrupp. The UK arm is widely viewed as more inefficient and costly than its Dutch counterpart, which is one of the lowest-cost slab plants in western Europe, and through its three outer harbours has the continent on its doorstep.

The UK business is hampered by logistical inefficiencies dating back to its nationalisation and re-privatisation in the British Steel days.

By Colin Richardson