British Steel is to be placed into insolvency after failing to stabilise the business.
The demise of the business would directly affect 5,000 jobs in the UK and is thought to endanger a further 20,000 in the supply chain.
The BBC reports that one of British Steel’s biggest customers is Network Rail, indicating implications for the rail industry.
British Steel was founded when Greybull Capital bought the Long Products Europe business of Tata Steel in 2016, reviving the British Steel name after privatisation in 1988. Ironically, after bringing back the pre-privatisation name, more calls for nationalisation of the business have been made, particularly in recent days, including from Labour and the GMB Union. Tim Roache, GMB General Secretary, said: “This is devastating news for the thousands of workers in Scunthorpe and across the UK.
“Consecutive UK governments have failed to protect our proud steel heritage, and now this Prime Minister is overseeing its demise. Ministers should have been ready to make use of all the options – including nationalisation – in order to save British Steel but they either don’t care or wouldn’t take off their ideological blinkers to save hard working people and communities.
“GMB demands urgent reassurances on what the future holds for the thousands of British steel workers and their families.”
The weak pound, following 2016’s EU vote, has seen the firm struggle. The US-China trade war is also said to be taking its toll on British Steel and Brexit uncertainty has also said to have had an effect.
Gerald Reichmann become the new British Steel CEO in April.