British Steel’s Chinese buyer is to cut 10 per cent of the workforce as part of turnround plans for the failed manufacturer.
Up to 500 jobs are expected to go, the unions Community, Unite and GMB said in a joint statement, after reaching an employment deal with the Chinese industrial conglomerate Jingye.
British Steel’s 5,000 employees, mainly based at its Scunthorpe plant in northern England, have endured months of uncertainty after the steelmaker collapsed in May. Since then it has been kept running by the Official Receiver, a court-appointed civil servant, and a taxpayer-backed indemnity.
In November, industrial conglomerate Jingye bought the company in a £50m rescue deal and has committed to investing £1.2bn in its turnround.
After weeks of negotiations, unions on Thursday struck a deal with Jingye on new employment contracts. This includes avoiding pay cuts and “ensuring any changes do not disproportionately affect employees differently”. The agreed deal is “broadly positive”, the unions said.
Alasdair McDermott, operations director at Community, said the agreement was “a better deal for employees than what was otherwise on the table”.
For the takeover of British Steel to go ahead, Jingye needs approval from the French authorities, a process that is not expected to be completed until February 27. British Steel’s plant in Hayange, northern France, is deemed a strategic industrial asset and France can veto any change of ownership. If Jingye do not get the green light from Paris, “British Steel would be broken up and sold in parts”.
The job cuts are a fresh blow to Britain’s steelworkers who have faced turbulent times as the industry grapples with falling steel prices and high energy costs. In December, Tata Steel announced it would cut 1,000 jobs in the UK as it struggles in difficult market conditions.
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January 24, 2020 at 04:44PM
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British Steel faces job cuts as part of manufacturer’s shake-up - Financial Times
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