Tata Steel is planning to sell its U.K. business after the company’s board unanimously concluded that saving its plants in the country was simply not affordable. A statement released by Tata read:
While the global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the U.K. and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency.
These factors are likely to continue into the future and have significantly impacted the long term competitive position of the U.K. operations in spite of several initiatives undertaken by the management and the workers of the business in recent years.
It is ironic that Tata Steel has come to dominate the discussion surrounding the future of the British steel industry. In the hay days of Empire, the steel industry in Britain fought tooth and nail to stop the formation of Tata Steel in India because they feared it would damage their lucrative rail market in the country.
