A workers' group of Tata Steel's Netherlands unit has raised concerns over the proposed Tata Steel-Thyssenkrupp merger of their steel operations in Europe in a 50:50 joint venture.
The major concern of Central Works Council(CWC) of Tata Steel Netherlands (TSN) is that, as per the MoU, the Supervisory Board of TSN will no longer be independent and that TSN's Board of Directors will not be properly constituted, a company statement said.
However, Hans Fischer, CEO of Tata Steel's European operations has assured that the company will follow due diligence in consultation with all relevant stakeholders as Tata Steel progresses in the transaction.
"We have now entered a period of due diligence with Thyssenkrupp following the signing of the MoU," he said.
He said the company has held a number of meetings and had constructive discussions and briefings with groups representing "our employees" including the European Works Council, the CWC and the UK Steel Committee besides the Supervisory Board and Board of Management of TSN
"These discussions are a priority for us as we seek their support for the joint venture. Tata Steel will follow due process in consultation with all relevant stakeholders as we progress in the transaction," the CEO said.
On the other hand, the CWC said there is no clarity as to how the new business will be financed and where the liabilities will be placed in the business.
The MoU also raises many other questions, in particular regarding the impact on the downstream activities, it said.
The CWC observes that, "we are at the start of a long and uncertain journey which, based on current indications, is unlikely to turn out well for TSN and its employees".
It has informed the Board of Directors and Supervisory Board of TSN that it will not be supporting these plans.
The CWC said it will draw on the support of external experts and employees of TSN can rest assured that the CWC will not simply roll over and accept decisions by the shareholder which are not good for TSN, and in particular for TSN employees.
The steel workers in Germany are also not in favour of the JV. Last month, post announcement of the JV, thousands of steelworkers had come on streets in protest over the planned merger which is expected to cost up to 4,000 jobs.
On September 20, Tata Steel had signed an agreement with German steel giant Thyssenkrupp to merge their steel operations in Europe in a 50:50 joint venture.
Disclaimer: No Business Standard Journalist was involved in creation of this content
