This week, India’s Tata Steel, announced that it would be cutting nearly 1,200 jobs at its plants in Scunthorpe and Lanarkshire. These events put the deepening manufacturing crisis in the UK into sharp relief as the layoff effectively marks the beginning of the end of the steel industry in the North.
Tata is the third steel company to announce significant loses and cuts over the past few weeks. Both Thailand’s SSI and Caparo Industries previously operated steelworks in the UK and have also been forced to make similar announcements. Tata Steel were in an impossible position to escape from press criticism. However, Tata’s response to the situation has arguably helped the Company to weather the storm and remain in the strongest position possible.
Immediately following the layoff, Tata Steel, U.S. Steel Corp., and other steelmakers called for increased trade protection from China’s overproduction and the resulting cheap supply of steel (see Wall Street Journal). This action has two major benefits; First, it helps to show that the manufacturers are being proactive to help mitigate the situation. Second, it helps the public to perceive the layoff as the outcome of an industry issue, by diverting the media’s attention away from Tata’s responsibility, and instead pointing towards an alternative macro cause - the oversupply of steel from China.
The industry issue could not be more pertinent, as President Xi Jinping and his wife have been touring the UK as part of the first Chinese state visit to Britain in 10 years. Almost all media outlets which covered the layoff have also investigated the overproduction of steel from China.
Tata’s example once again demonstrates the importance of extensive communication between companies, the media and the public in times of financial distress. A proactive approach to crisis communications helps both the public and the media put things in perspective, and could perhaps even draw sympathy as companies operate in difficult business environments.
This week, Abchaps attended Small Cap UK’s 20 years of Small Cap party as a guest of UHY Hacker Young at the Brand Exchange, celebrating 20 years of small cap equities in London.
Fieldfisher has appointed Matthew Hinxman as partner in its finance practice, joining from Baker Botts. At BNP Paribas, Wike Groenenberg has joined as global head of emerging markets strategy, having previously been head of strategy for BlueBay Asset Management’s emerging macro fund. Finally, Pinsent Masons have appointed telecoms specialist Reg Dhanjal as partner. He joins from DAC Beachcroft.
“Cataclysmic” - a momentous and violent event marked by overwhelming upheaval and demolition; an event that brings great changes.
All Rugby’d out? Try something a little off piste this weekend as Ice Hockey teams London Raiders take on the Bracknell Hornets, the atmosphere will be electric at the Lee Valley Ice Centre in East London, as this sport takes no prisoners.
Sushi Samba is closing this summer’s party season with their last day party in conjunction with Dayzed, if you fancy sipping on some bubbly and enjoying views from the 39th floor of the Heron Tower then head back into the City this Saturday.
And lastly do not forget that this weekend the clocks go back, so you can look forward to that extra hour in bed, nothing worse than getting up for work an hour early on a Monday!
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