The senior management at Tata Steel’s UK unit is expected to meet representatives of labour unions later this week in a crucial meeting amid concerns over the European Commission’s probe into the proposed joint venture with thyssenkrupp.
The meeting, which could be held on May 10, is important for the management to address employee concerns. Employees are worried that the two partners will offer to sell or close down units in the UK for receiving the commission’s nod to clear the joint venture.
The commission is probing if the JV, which was finalised in 2018, will hamper competition and pricing in some key steel segments in the European market.
“There is a meeting with the European workforce representatives. Some news can be expected,” said an industry executive based in London.
The meeting will be a follow up of a similar one between union representatives and Tata Steel Chairman N Chandrasekaran in Mumbai last month. Officials of European Works Council and Community were present in the meeting.
The unions have have been unhappy about Tata Steel and thyssenkrupp not consulting them before presenting remedies to the Commission.
Responding to queries from Moneycontrol, a Tata Steel spokesperson said:
“Tata Steel and thyssenkrupp believe the comprehensive package of solutions proposed do address the concerns expressed by the European Commission, while also supporting the industrial logic of the joint venture and the interests of all our stakeholders.
“We believe the proposed joint venture would help both companies address the structural challenges the European steel industry continues to face, offering the greatest potential to safeguard jobs and steelmaking for generations to come.”
Executives separately told Moneycontrol that it is possible that the commission will ask for further remedies from the two partners.
The commission had identified three industry segments — automotive steel, coated steel used for packaging and electrical steel — where the JV may harm competition.
But thyssenkrupp said there is ‘scope for agreement.’ A Reuters story, quoted a thyssenkrupp spokesperson saying: “The Competition Commission has taken the reworked commitments proposed by ThyssenKrupp and Tata Steel as an opportunity to conduct another market test. There are still a number of ways to adjust our commitments without compromising the commercial logic of the joint venture.”
Given the new concerns, it will be important for the Tata Steel Europe management to convince unions of its proposals, especially if more concessions are to be offered to the commission, which is expected to deliver its verdict by June 17.