Steel - Mouse swallows elephant
WORKERS, MAR 2007 ISSUE
As reported in the January edition of Workers, the British steel industry is in a continued state of turmoil. And once again, a foreign buyer is the cause.
Tata, the Indian manufacturing conglomerate, has beaten Brazil's Companhia Siderurgica Nacional in the head-to-head takeover battle for the Anglo-Dutch steel maker Corus. The result was an artificially inflated buying price for Corus – shares worth £2.00p in 2005 traded for £6.08p today, which then resulted in the largest drop in Tata's shares in recent times.
Community, the union formed in 2004 out of the merger of the Iron and Steel Trades Confederation and the textile and clothing union KFAT, has issued a stark warning to Tata: publish plans for future investment and preservation of steel producing capacity in Britain or face resistance across the industry.
The response from Tata's chairman was to refuse to give any guarantees on jobs or investment. The "mouse which has swallowed an elephant" may find it cannot digest its victim.