Government urged to take action to protect steel jobs after Greensill collapse
MPs and union representatives have today urged the government to take action to protect steel jobs under threat after the collapse of Greensill Capital.
The boutique bank, which was advised by former PM David Cameron, was a major backer of Sanjeev Gupta’s GFG Alliance, a global steel empire employing 35,000 people around the world.
Despite assurances from Gupta, who today met with union representatives, that his firm had “adequate funding” despite the bank going into administration, ministers are being asked to step in if the conglomerate fails.
The billionaire today said that GFG, which owns Liberty Steel, was in the processing of securing alternative funding.
Around 3,000 people are directly employed by Liberty Steel at nine steelworks across the country, and a further 2,000 work for engineering firms whose work depends on the plants.
In a joint statement, unions Community, GMB, and Unite, said: “The meeting was positive and constructive, and it is clear Mr Gupta intends to secure a refinancing of the debt to provide the business with the necessary liquidity going forward.
“We recognise Mr Gupta’s desire to see Liberty Steel succeed, and recognise also his personal contribution in giving distressed UK steel assets a new lease of life.
“The unions have told Mr Gupta our priority is to secure the future of all Liberty Steel’s UK assets, and to this end all options should be considered.
“Given the strategic importance of Liberty’s steel operations, and their fundamental importance to delivering the UK’s climate objectives, we believe government must take an active role to facilitate a comprehensive solution that safeguards the future and protect jobs.”
A number of MPs have also urged the government to do “whatever is possible” to protect jobs. In recent days officials from Liberty Steel have been meeting with ministers, including business secretary Kwasi Kwarteng.
Miriam Cates, MP for Penistone and Stocksbridge, where one of Liberty’s steelworks is located, told City A.M.:
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“The jobs provided by Speciality Steels are highly valuable to our community and I understand that this is an uncertain time for employees and their families, many of whom live in the Penistone and Stocksbridge constituency.
“I firmly believe that steel is not just an important part of the history of Stocksbridge, it should also be a vital part of our future and I will continue to work closely with management and the Government to do whatever is possible to help secure a strong and profitable future for Stocksbridge Speciality Steels.”
In a statement after the union meeting, a spokesperson for GFG stressed that although the situation was challenging, the firm had enough money to keep going.
“Sanjeev had a productive meeting with the unions today to discuss the plan to make the parts of the UK businesses facing weak market conditions more financially sustainable and address the disruption caused by the situation at Greensill”, they said.
“Liberty Steel Group has provided significant support to the UK speciality steel business which has seen the demand for some products fall by 60 per cent following the downturn in the aerospace sector due to Covid-19.
Read more: Greensill files for administration putting thousands of steel jobs at risk
“As part of the prudent steps we are taking to manage cash, we are discussing new opportunities with customers and suppliers to improve cash flow and looking to secure additional working capital facilities to support the business.
“We also continue to use the furlough scheme to support employees affected by the weakness in the aerospace market. We will continue to work closely with the unions and our employees to identify the most effective ways of supporting the business and preserving jobs.”