HUNDREDS of North-East steelworkers face an uncertain future after Tata Steel announced it was in talks to sell off its loss-making long products business.

Unions have asked for urgent talks with Cyrus Mistry, Tata Steel chairman, over the proposed deal to sell the troubled division, which employs 750 North-East workers and 6,500 across Europe, to US investors the Klesch Group.

Billionaire former steel worker Gary Klesch from Cleveland, US has made the offer for the business which includes the special profiles businesses in Skinningrove, east Cleveland and Darlington; Teesside beam mill at Lackenby, near Redcar, which supplied the new World Trade Center site in New York; a rail consultancy in York; distribution sites in Teesside and Newcastle, and Tata’s 4,000 jobs steel plant in Scunthorpe.

Mr Klesch, a former electrician at the Republic steel mill in Ohio, played down fears that the deal would lead to job cuts and the closure of some sites.

“Everyone seems to be talking about this deal inevitably leading to job losses,” he told The Northern Echo. “That is not the case. It is far too early to talk about anything of that nature at this stage.

“It is natural that the workforce will be feeling uncertainty and concern.

“I grew up in a steel town, and worked at a steel mill. I know the challenges this industry faces and I hope that they will have the confidence in what we are doing so that we can go forward together.”

The Northern Echo:

Mr Klesch will be travelling to the UK in the coming weeks to assess the various sites and to conclude due diligence ahead of a deal being completed in spring 2015.

He specialises in buying and turning around poorly performing businesses, but denied that he was looking to make a quick profit.

“We regard this as long term investment. It will take a number of years to turn things around,” he said.

George Dunning, Redcar and Cleveland Council Leader, and a former steelworker himself, hoped Mr Klesch planned to grow the long products business and “not do what (former owners) the Steel Consortium did, i.e. make mega bucks and do a runner when the going gets tough.”

Tata wants to offload the long products business which has been struggling to make a profit amid fluctuating steel prices and a drop in demand from China. The India-based group intends to concentrate on its UK steel strip business. The firm’s sites at Hartlepool and the Teesside Technology Centre, in Middlesbrough, are not part of the proposed sale.

Karl Koehler, chief executive of European operations, said Tata was committed to the UK steel industry and noted that £1.2bn had been invested and 1,200 apprentices and graduates trained since it bought Corus in 2007.

Community, Unite and GMB union leaders were angered they had not been consulted over a sale they said could have “serious consequences” for employees and contractors.

“The unions have been treated with contempt in this process as the level of consultation that we would expect ahead of such a major strategic announcement has not taken place," they said.

“The fact that Tata Steel wants to abandon half of its European operations and pull out of an entire strategic market does not bode well for the future and ends Tata Steel’s vision to be a global steel player. Tata Steel has long emphasised that its European operations are ‘one company’ but today’s announcement is the final nail in that concept’s coffin,” they added.

Next week, the unions will meet to decide their next course of action.

Business Secretary Vince Cable said the proposed sale shows the harsh reality of trading conditions in parts of the steel industry.

"I met the global head of Tata in India this week and he has personally re-affirmed to me his company's commitment to the British steel industry... my officials and I will continue to work closely with Tata Steel and seek to meet the potential buyer, Klesch, to understand more about their plans,” added Dr Cable.

Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland warned the industry remained “very fragile” and urged ministers to cut energy costs for heavy industry.

“The coalition government must now roll up their sleeves and get involved in an active industrial policy to maintain our key industries like steel. They must work to protect and support our hard working loyal communities in Teesside, East Cleveland and across the United Kingdom.

Last night, Prime Minister David Cameron agreed to meet MPs to see if the Government could help.