A day after Indian-owned steel giant Tata Steel announced that it may be forced to sell its British business to stem heavy losses, British Prime Minister David Cameron said that his government was “not ruling anything out” to deal with the crisis. However, in comments made immediately after an emergency meeting on the crisis, he added that nationalization was not the right answer.
“What we want to do is secure a long-term future for Port Talbot and for other steel-making plants in the United Kingdom,” Cameron said Thursday. “This is an issue where I've had teams of ministers working for months to help this industry, to make sure that we procure British steel for our ships and for other vital industries in the U.K.”
The U.K.’s largest steelmaker has been squeezed by cheap imports of Chinese steel into Europe, and is believed to be losing nearly 1 million pounds ($1.44 million) a day. European Union regulations restrict the tariffs that member nations can levy on imports, and, as a result, Chinese steel imports have more than doubled over the past two years.
Moreover, the bloc’s state-aid rules also prevent the British government from funding a rescue package for Tata.
In a statement released Wednesday, the company said that over the past five years, it had suffered asset impairments of over 2 billion pounds in the U.K, forcing it to extend “substantial financial support” to its operations in the country.
“The Company has also been in deep engagement with the UK Government in recent months seeking its support to achieve the best possible outcome for the UK business,” Tata Steel said in the statement. “Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most feasible option in a time bound manner.”
If the company does shut down its British business, it would put at least 15,000 jobs in the country at risk, including up to 7,000 jobs at the Port Talbot Works in Wales — the U.K.’s largest steel plant.
“The situation at Port Talbot is of deep concern. I know how important those jobs are; those jobs are vital to workers' families, vital to those communities, and the government will do everything it can, working with the company to try and secure the future of steel-making in Port Talbot and across the country,” Cameron said Thursday.