Carmakers search options to UK steel as Tata looks for buyers
business Updated: Jun 03, 2016 05:53 IST
LONDON: Carmakers in Britain are making plans to get more steel from continental Europe, putting pressure on Tata Steel to secure a sale of its troubled UK plants before it loses customers.
India’s Tata Steel has serious offers on the table after putting its entire UK business up for sale in March to stem heavy losses, blaming costs, market weakness and cheaper imports from countries such as China. Carmakers, who make up around 60% of Tata UK’s customers, are nevertheless making contingency plans for alternative sources for the speciality steel they need.
“If Tata fails, our purchasing teams are already working to find alternative sources in Europe,” said a spokesman for General Motors-owned Vauxhall, which sources 60% of its steel from the UK. Vauxhall and five other carmakers built almost 99% of Britain’s 1.6 million cars last year.
Honda, which sources 10% of its steel from the UK, said “there is a contingency plan in place if the situation with Tata changes”. It gave no further details.
Nissan, which operates Britain’s biggest car plant in northern England, said this year it bought 45% from Tata’s Port Talbot plant, but the amount changes every year.
And Jaguar Land Rover (JLR), owned by Tata Motors, gets around 30% of its steel from Tata’s Port Talbot plant.
A spokesman for BMW, which sources some steel in the UK and produces 9% of total volumes here, said “as a rule we always make sure we have more than one supplier to prevent us from becoming too dependent on any single company”. He declined to comment on future supply plans.
Tata Steel acknowledged a speedy sale is crucial for both customers and employees.
HUGE BLAZE AT TATA STEEL PLANT IN UK
A huge blaze involving thousands of litres of oil broke out at a Tata Steel plant in the UK on Thursday but there were no reports of any injuries. The fire at the Aldwarke Lane plant in Rotherham, in the South Yorkshire region of England, was contained by this morning.
Tata Steel said the fire had broken out as part of the steel making process.