London: Thousands of workers at Tata Steel fear the firm may fail to revive the ailing Port Talbot plant with its parent company preparing to vote on a turnaround plan this month, according to a media report.
Executives will vote on a turnaround plan on March 29 that will require a fresh cash injection of around 100 million pounds ($144 million), The Telegraph reported.
Port Talbot executives drew up the strategy, together with colleagues at Tata’s European operations, after the 1,050 redundancies it announced in January.
The turnaround plan envisages Port Talbot plant, with more than 4,000 workers, moving from 200 million pounds a year losses to a profit of 100 million pounds within two years, the report said on Saturday.
However, the employees believe they are being “set up to fail” amid fears they will only be given a year to turnaround the plant which is too short a time to get back into the black. Tata’s board is not expected to approve fresh investment, the report said.
The strategy for the survival of the so-called strip business is understood to target 350 million pounds of savings and cost improvements, including mothballing one of Port Talbot’s blast furnaces, as well as pay cuts.
There are also concerns about how the case for pumping further money into Port Talbot plant will be presented to the board in India at the meeting, the report said.
Tata has invested about three billion pounds into its European steel operations since buying them from Corus for 6.7 billion pounds in 2007. However, since then the steel industry has slumped on falling demand and global overcapacity. Imports of cheap Chinese steel have also hit hard.
There have been calls for the Government and the EU to impose stiff tariffs on Chinese imports. Tata recently took an 850 million pound write-down on its UK operations.
“We have accepted previous turnaround schemes and the jobs losses they included because there was a future at the end of them. Now it looks like we are taking more job losses and more pain with no chance of a future at the end of them.”
“All we want is the board to show confidence in us by not making a decision that will condemn Port Talbot and give us the chance to achieve the turnaround,” a senior Port Talbot employee told the paper.
“We have invested significantly in our UK operations. Recently we have sought to reduce costs to become more competitive and better able to withstand extremely challenging market conditions. The environment for steelmaking is not improving and Tata continues to invest considerable amounts into its UK business just to sustain operations,” the paper quoted a Tata spokesperson as saying.