What We Should Learn From British Government Post Tata Steel Decision To Firesell British Operation

With full of fanfare Tata Steel with an intention of being global power house in metal sector and capture the lucrative high value steel segment oriented in Steel spent Billions of $ in 2007 and subsequently poured in many Billions of $ in infrastructure enhancement and generated thousands of jobs across Europe.

It seems that management of Tata Steel and Sons missed to read the red signal and kept on incurring heavy losses and building their debt level which directly impacted their net worth.

The Middle East crisis and more than expected downturn in Europe and its continued recession were hurting Tata Steel but downturn in China manufacturing sector and over capacity of China Steel market and with the Chinese’s Industry supportive government, the steel dumping started happening across the globe.

It immediately impacted Indian Steel sector and made Indian steel sector production cost higher than the Chinese steel landing price. Indian government post lots of pressure and persuasion by the steel sector imposed MIP to offer some relief to steel sector. Tata Steel Indian Operation kept on doing well but dragged badly by their British operation

The shutdown threat by their British employee on wage hike and pension hike showed their attitude towards the organization wherein employee were less supportive to support the organization with extra effort to mitigate the competitive threat instead of that they kept on dragging Tata Steel International Division management to deal with them rather than deal with the competition.

All the scenario changed the moment Tata Steel Board took strong and firm decision to pull out of Britain completely shocked the British government as well as the employee. Even Prime minister started talking about safeguarding the employment of 10 – 15k employee and government even went to extra length to propose financial support to the company who will come forward to take over the remaining unsold part of Tata Steel UK operation. I appreciate British government touchiness about the jobless within any sector but they should also be sensitive about the organization coming and investing heavily without the same kind of protection. I was expecting that British Government will be coming out with strong law against dumping to enable Tata Steel UK to continue operative and profitable.

In comparison to British Government, I still appreciate them when it comes to their care about citizen welfare but when it comes to India, no one is bothered how many jobs are lost in manufacturing, power, mining. In my point of view, Tata Steel UK saga should be used as an example of learning for all of us to be sensitive towards the society and stand together including government to support those family who loses their job during downturn and “it becomes more important as there is no system of government support and citizens suffer.

Article Written By-- Devendra Prasad
Originally Published - www.linkedin.com
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