I have not had much inside feedback on how things are in Port Talbot, but I do keep an eye out for any news that might be of relevance for my situation and that of the pension scheme.
First of all, I heard from an inside source that Strip Products UK has been making a (small?) profit, more or less since the Brexit referendum. Whether it amounts to much I cannot tell.
Also, Cyrus Mistri has been sacked as chairman of Tata Sons, but for the time being at least remains in place as chairman for Tata Steel. There seems to be a lot of bad feeling about Ratan Tata interfering with the running of the business, and I wonder whether he had anything to do with the change of heart when it came to selling off the South Wales part of Tata Steel.
On top of that, there’s the deficit of the British Steel Pension Scheme that (due to the drop in the value of the pound) saw its shortfall reduced from £700 million to £50 million – how, I’m not able to say, but rather puzzling nonetheless. Still, what can drop so fast for no apparent reason could equally mushroom for no apparent reason.
And then there’s the very latest, where the discussions with Thyssen Krupp would first lead to Port Talbot becoming a one-furnace operation, something that appears to be under discussion with the unions. It might well mean that the price for keeping both blast furnaces would be the closure of whatever is left of the defined benefits scheme.
Will there be any knock-on effect on people who have actually retired ? Will a merger with Thyssen Krupp mean that an arrangement will be made with the Pension Protection Fund ? That’s still up in the air. Only time will tell.
All that appears to be clear is that any future investment (apart from modernising the power plant) will depend on making fairly substantial profits. Will the deal with the unions (if it comes to an agreement) mean a long-term future for its blast furnaces ? Again, if the plant remains profitable then there’s probably not an immediate issue.
But can a period of solid profits be maintained in years to come ? That, I suppose, is the million dollar question.
- Tata Steel: Unions close to deal to keep Port Talbot open
- Ratan Tata prevented key reforms in Tata Motors: Cyrus Mistry
- British Steel pension shortfall shrinks to around $60 million