Merger of Tata Steel and ThyssenKrupp in jeopardy

Negotiations between Tata Steel and Germany's ThyssenKrupp to merge their European steel operations have been ongoing for several months, but significant obstacles remain.

Germany's largest union, IG Metall, confirmed this week that it foresees "high risk" amid fears that the merger will result in the loss of thousands of jobs and plant closures in Germany.

In the UK, the Pension Regulator has warned of “significant issues” to be addressed regarding the pension system at Tata Steel's facilities, now called the British Steel Pension Scheme.

Earlier this year, Tata Steel workers in the UK voted on bailout proposals and 8,000 jobs, including around 4,000 in Port Talbot. Tata Steel UK, which has been under threat of closure since March 2016, when its Indian parent company revealed it was considering divesting the assets. However, Tata Steel plans to invest £ 1bn as part of its turnover to modernize its UK capacity in exchange for a retirement plan change with a less generous contributory scheme.

But while Tata Steel has received workers' support to change its future retirement benefits, no solutions have yet been found for existing obligations in the British Steel Pension Scheme.

The proposed merger and joint venture between Tata Steel and ThyssenKrupp would secure the future of the Port Talbot smelter and a total of 8,000 jobs in the UK. However, the agreement is in jeopardy due to difficult negotiations over pensions and opposition from German unions.