The Financial Times has reported the EU referendum result could damage the chances of Tata Steel maintaining its operations in the UK.
The morning the Leave decision was announced Tata’s shares fell 9.1 per cent to Rp303.70 in Mumbai, a drop beaten only by the 11.6 per cent decline for sister company Tata Motors, which also has a major UK subsidiary, Jaguar Land Rover.
According to the newspaper’s source, which they said was “someone close to the company”, there would be “recalibration” of Tata’s plans, as the EU is a major market for Tata Steel UK: “This could change everything.”
Voters in Neath Port Talbot supported Brexit by 57 to 43 per cent. Steelworkers were said to be largely in favour of breaking away from the EU, although a letter to Port Talbot staff from Tata Steel Europe’s Tim Morris had warned a Leave vote could affect steel jobs.
Aberavon MP Stephen Kinnock had warned that the “chaos and uncertainty” of Brexit could weigh heavily on the British steel industry.
“What impact would Brexit have on the order book? Will it be a Canada or a Norway model? Could Brexit open up the floodgates to Chinese dumping even further, as we will be out on our own, lacking the leverage and shelter that being part of a trading bloc of 500m people brings?” he wrote.
Meanwhile, Community Union has criticised private talks between Tata and the government, with suggestions Tata may decide to retain its UK operations. Community issued a statement expressing “serious concerns about the integrity” of Tata’s sale process.
“If Tata do indeed intend to retain the business, then they need not only to make this clear to their loyal workforce, but also lay out their long-term plan for investment in steelmaking,” the statement said. “Were Tata to remain, they would have a long way to go in regaining the confidence of steelworkers.”
At the time of going to press, an imminent announcement was expected from Tata on its intentions for Port Talbot’s future. You can read the latest at www.porttalbotmagnet.com.