London– Indian multinational Tata Steel is set to begin crucial talks with trade union representatives of its British steelworks to settle the deadlock over a 15 billion pound pension scheme for its workers, British media reported on Sunday.
According to The Sunday Times, Tata Steel will start talks here with unions on Monday to break the deadlock over a 15 billion pounds sterling pension scheme, which is the major obstacle in its merger with German steel maker Thyssen Krupp.
The newspaper said the Indian company “is understood” to have called two days of pension talks to try to secure the merger of its European operations with those of Thyssen Krupp.
German engineering conglomerate Thyssen Krupp and Tatas have held talks on combining their continental European steel operations, as global overcapacity weighs on prices and profits.
Following this summer’s British referendum verdict to exit the European Union, which has raised concerns about the viability of the British steel industry that has already been under prolonged and serious pressure,there were reports in the local media that Tata Steel would likely to put the sale on hold.
The British government has been trying to help Tata Steel by consulting on drawing up special legislation to lower pension benefits for many of the 130,000 members of the old British Steel pension fund. It has also offered hundreds of millions of pounds worth of loans and the taking of a potential 25 per cent stake in the business.
Tata acquired the British Steel Pension fund in 2007. It has 130,000 members and a deficit of 700 million pounds (about $900 million).
The government of then Prime Minister David Cameron had proposed a change in legislation to reduce payouts by altering the inflation link to wage hikes.
Tata Steel said in a statement that it “continues to responsibly develop options to identify the best prospects for the future sustainability of our UK operations and the best outcome for members of the British Steel Pension Scheme”.