Sincerely don’t understand why “subsidising a Chinese company to continue operations” is considered preferable to “nationalising it for free upon bankruptcy”. What am I missing https://www.bbc.co.uk/news/articles/cp311nr7w34o
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Exactly the same could be said about Thames Water - most other water companies too for that matter - instead of allowing some of the most rapacious private equity outfits to step in and asset-strip it.
If we bought the plant then we would presumably have to take on at least some of the debt?
Do we really want to try and make a profit out of a failing steel business? I don't know about you but it would seem like a daunting prospect to me.
From the article:
“The government offer to purchase the raw materials is a way for it to buy time while negotiations over the future of the plant continue.”
Govt can’t just nationalise British Steel in an instant.
Possibly because then the govt would have to continually fund it due to costs of importing all the raw materials for manufacture. Probably end up way more.expensive than trying bail it out again.
I think you’re missing that a ‘Universal Theme Park’ is to be built in the south of England - clearly much more important in the weird world of the Labour leadership than steel making in Scunthorpe!
The government is plenty big to manage both, and the park is being built by a private company. I don’t think it’s unfair to (at the moment) prioritise the publicity of a good news story vs the publicity of a bad news story. They can work on both at the same time.
The case for subsidies rather than nationalisation in the medium-term is presumably that it's unclear if the business can be rescued in a cost-effective manner and subsidies are cheaper and easier to turn off whilst the owners run the risk of the business model not being viable?
Its not uncommon for a potential purchaser of a business about to go bankrupt to put some money in before actually buying it so that operations do not shut.
Jingye really really wants to shut the company yesterday, so I suspect this is government funding while the terms of the Government buy out is worked out and probably DD completed
Jingye did not want to keep running the company even with £50 million of support so there is quite likely there is some massive liability coming down the track or its losing money hand over fist
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But I guess this could all be part of a negotiation
Do we really want to try and make a profit out of a failing steel business? I don't know about you but it would seem like a daunting prospect to me.
Better to maintain the supply of raw materials in the short-term while moving towards nationalisation.
“The government offer to purchase the raw materials is a way for it to buy time while negotiations over the future of the plant continue.”
Govt can’t just nationalise British Steel in an instant.