Rediff News
All News

NewsApp (Free)

Read news as it happens
Download NewsApp
Rediff.com  » Business » No guarantee on Corus jobs: Tata

No guarantee on Corus jobs: Tata

Source: PTI
Last updated on: February 03, 2007 16:07 IST
Get Rediff News in your Inbox:
Acknowledging that the company had paid "very close" to its top price for Corus, Tata Group chairman Ratan Tata has said the company could not give any guarantee over safety of jobs as it plans will be to make the UK operations more profitable.

The company had so far done only "paper" due diligence on Corus and had yet to examine the steelmaker's plants in detail, Tata told the Financial Times in an interview.

For this reason, Tata said he could not give any guarantee on job cuts. "I would not even attempt to do so because it would be wrong of me to give those assurances or to deny that that was so". "But I would say that we are not a company that would first look at jobs," he added.

Tata's comments come after Britain's largest steel trade union, Community, demanded a meeting with the tycoon seeking assurances he will remain committed to expanding Corus after his successful bid.

He said the company would apply to Corus the lessons it had learnt from upgrading its 100-year-old Indian plant, which it has transformed into one of the steel industry's highest-margin producers.

"Our plan would be to try to make the UK operations more profitable," he said. Tata said if the company had lost the Corus bid, its disappointment would have gone beyond the group and it would have been an issue of great disappointment in India.

"So on the one hand, you want to do the right thing by your shareholders and on the other hand, you did not want to lose," he said.

Tata Group, which has large businesses in auto, telecom and information technology, paid 6.7 billion pounds for Corus in a head-to-head auction with Brazil's Companhia Siderurgica Nacional this week.

The acquisition makes Tata the world's fifth largest steelmaker and India's largest private sector conglomerate, and has turned Tata into a national hero in a country that is increasingly looking to take its place among the world's leading economies.

To make the deal work, Tata Steel would have to vastly improve the efficiency of Corus, whose capacity of about 18 million tonnes a year is more than three times that of the Indian company's on a stand-alone basis but whose margins at about seven per cent are less than a quarter of those of Tata.

Community, which describes itself as the main union in Corus representing 80 per cent of its British employees, also sought government backing for the steel industry's attempt to ward off "accelerated or slow demise" and protect jobs.

Corus employs 47,300 people worldwide, including 24,000 in Britain and 11,400 in the Netherlands. It is Europe's second-largest steel maker and the world's ninth-largest, producing around 18 million tonnes per year. Tata steel, India's biggest private steel company, employs 39,650 people.

The Tata-Corus saga

Get Rediff News in your Inbox:
Source: PTI© Copyright 2020 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
SHARE THIS STORY 

Moneywiz Live!