Fears for UK jobs as Tata Steel wipes £1bn from value of Europe operations
Unions said writedown will worry 18,500 staff still reeling from last year's cuts
Tuesday 14 May 2013
Fresh fears over the future of UK steel jobs were raised today after India's Tata Steel wiped £1 billion from the value of its European operations.
The group, which has UK operations at sites including Port Talbot, Rotherham and Scunthorpe, blamed the tough economy in Europe where steel demand has slumped by about a third since the start of the financial crisis.
Unions said the huge writedown will worry its 18,500 staff in the UK who are still reeling from 900 job cuts last year.
Tata, which bought Anglo-Dutch steel giant Corus in 2007 for £6.2 billion, has endured a tough time during the downturn as demand from construction and car-making dived, forcing thousands of lay-offs and plant closures.
It employs more than half its 33,000-strong European workforce in the UK.
The company announced another wave of redundancies in November, including almost 600 in South Wales, in an effort to cut costs.
Tata warned tough conditions are likely to persist for the "near and medium-term".
The group said: "The impairment is primarily due to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in 2012-13 by almost 8 per cent which in aggregate results in almost 30 per cent since the emergence of the global financial crisis in 2007."
In February its European business reported a 78 million US dollar ( £51 million) underlying loss for the three months to the end of 2012, with steel deliveries falling to almost 10 per cent to 3.02 million tonnes.
Paul Talbot, from the Community trade union which represents many UK steel workers, said: "These statements are concerning, there's no question about it. They are concerning to the employees who at this moment are still working their way through the last announcement.
"It's no secret that the steel industry has been going through difficult times.
"Time after time we've been given assurances that Tata have to plans to cut back on investment in the UK again in any further restructure or closure of plants."
The 1.6 billion US dollar (£1.05 billion) writedown of Tata's assets and goodwill is thought to be one of the largest ever by an Indian company.
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