Blaming Brexit, British Steel collapses putting nearly 25,000 jobs at risk
The company was seeking a government bailout, but talks ended without agreement. The High Court ordered the company into compulsory liquidation, according to the government’s Insolvency Service.British Steel was reportedly seeking a government loan of £75 million ($95 million) to cover losses it said it suffered because European orders had evaporated due to the uncertainty surrounding Brexit. “Many of the challenges we face are not unique to the steel sector — the whole manufacturing sector is crying out for certainty over Brexit, unable at present to plan with any accuracy the trading relationship it will have with its biggest market in just five months’ time,” UK Steel, the industry’s trade association, said in a statement this week.British Steel, which had already been granted a government loan of £120 million ($152 million) last year, was bought by investment firm Greybull Capital from India’s Tata Steel in 2016 for £1.Jonathan Owens, supply chain and logistics expert at the University of Salford Business School, said that the company was struggling in a very competitive market.”If the company cannot be market competitive, then this £75 million loan would perhaps only be delaying the inevitable,” he said.British Steel produces more than 2.8 million tonnes of steel a year. It employs around 4,000 people at its works in Scunthorpe, northeast England, and 400 in France. Trade unions warned Tuesday that 20,000 jobs in the supply chain would be at risk if the company collapsed.
