Tata Steel is to cut 1,500 jobs at two steel plants in the North East, but the company claims boss Ratan Tata's comments that British workers are lazy were taken out of context.
Tata Steel, part of the £68bn Indian industrial group Tata, is to cut production and axe up to 1,500 jobs at two sites in the north east of England due to weak demand for its products.
The statement released on Friday May 20 said it would close or mothball its Scunthorpe plant, putting 1,200 jobs at risk. A further 300 would be cut at the plant in Redcar, Teeside.
Both plants make long steel products such as steel bar, rods and rails. The slump in the UK construction market and the high cost of steel manufacture imposed by new green taxes were blamed for the cuts.
Following the statement, an article in The Times on Saturday reported that Tata’s boss Ratan Tata said British managers were “lazy”, in which he described how “nobody is willing to go the extra mile” at Jaguar Land Rover or Corus, the two British firms which Tata bought in 2008 and 2006.
“Friday, from 3.30 pm, you can’t find anybody in their office,” he told the Times.
A statement issued by Tata Sons, the group holding company, at the weekend described the reports as “misleading and mischievous”.
According to the statement, “The Times newspaper in London yesterday reported an interview with Mr Ratan Tata, Chairman of Tata Sons, which took place two months ago. In the interview Mr Tata speaks about the management ethos of Corus and Jaguar Land Rover at the time of acquisition. He says that managers’ work ethic at that time was not to “go the extra mile” and to leave early on Friday afternoons.”
Attacking the media reports, the release said: “We would like to convey our disappointment at the attempt to sensationalise and replay conversations out of context. The news item is misleading and mischievous.”
His statement on “work ethics” and not going “the extra mile” when it came to British workers in these companies has kicked up a storm in the UK after the media reported them.
In the original statement, Tata announced it would invest £400 million in a five-year plan that attempts to make the loss-making long products business more profitable.
“The long products business as a whole has continued to make losses over the last two years. The decline in some major markets, particularly the construction sector, has been a key factor,” it said in a statement.
“Demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to fully recover within the next five years.”
It added: “As a consequence, the business has proposed a plan to further reduce costs, focus on products that create value and improve its ability to respond quickly to demand fluctuations.
“This strategy includes a proposal to close or mothball parts of the Scunthorpe plant and puts at risk 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites,” Tata said.
Karl-Ulrich Köhler, boss of Tata Steel’s European operations, said: “The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action.”
Mr Köhler has previously expressed deep concerns about the viability of steel-making in the UK following the introduction of a carbon floor price with the Budget in April. He said said the tax was “exceptionally unhelpful and potentially damaging”, and that it had dealt the industry “a potentially severe blow”.
Tata Steel’s sites at Redcar and Scunthorpe were acquired by Tata in 2007 as part of its $13.7-billion purchase of Anglo-Dutch steelmaker Corus.