Ex-Tata chief: UK Steel firm overmanned

Ratan Tata, who retired in 2012 after helping the company achieve vast growth, defended the decision to sell the firm's UK plants by the Indian firm.

The company plans to sell the UK steel business. It employs 15,000, including more than 600 at sites in Wednesfield and Brierley Hill.

Mr Tata said cuts would be necessary to make the Port Talbot steelworks profitable, but it was possible.

The comments are Mr Tata's first intervention since the firm announced it was selling its loss-making UK business.

Negotiations over the sale of the plant in Port Talbot, which employs around 4,000 workers, have been taking place for several months, well before Tata's announcement last week.

Speaking in Washington at a US Export-Import Bank conference, Mr Tata said the 'bottom just opened up' at the UK steel operations, following a rise in exports by Chinese steelmakers after demand from their domestic market slowed.

"Right now the problem is that the English facilities are underinvested (and) overmanned," said Mr Tata.

He added that a potential buyer at Port Talbot would need to "cut back on the size and the scale of the operations and make them profitable".

This, he said, was "extremely challenging" but not impossible.

Yesterday, metal firm Liberty House took control of two mothballed Tata mills in Lanarkshire following a buyout hailed by Scottish First Minister Nicola Sturgeon as a demonstration of the "art of the possible."

The keys to steel mills at Dalzell and Clydebridge in Scotland were formally handed to the new owners, heralding "a new era" for the factories which had been threatened with closure.

Scottish First Minister Nicola Sturgeon hailed international metal firm Liberty House's takeover from Tata Steel as a demonstration of the "art of the possible" at the handover in Motherwell, North Lanarkshire.

The plants were secured last month in a "back-to-back" agreement, involving the Scottish Government buying them from Tata Steel, and immediately selling them on to Liberty.

Ms Sturgeon offered to advise the UK and Welsh governments on its experience to prevent the closure of another Tata plant at Port Talbot in Wales.

She said: "This is the art of the possible.

"I am standing here as First Minister in the happy position of saying that we're about to hand over two steel plants that otherwise would have closed to a new owner that wants to get them back into operation, employing people and producing steel.

"I very much hope that in the not-too-distant future that the UK Government and Welsh Government might be able to say the same about Port Talbot.

"Any experience that we have got here that we can bring to bear we will be very happy to do so."

Ms Sturgeon the sale "is the beginning not just of a new era for Scottish steel, but a new era that builds on the huge experience and high skillset of the workforce at Dalzell and Clydebridge".

Liberty House expects to create 150 jobs to get the plants up and running again.

Scottish business minister Fergus Ewing said: "When we convened the Scottish steel taskforce back in October, we did so with a determination to do everything possible to secure a new operator and to do whatever we could to make the plants an attractive proposition.