The 215-year-old-firm announced yesterday it had been acquired by the Ministry of Defence in a £2.6m deal.
It marked an unusual move by the Conservative led Government which has historically spoken against nationalisation but yesterday pledged to invest £400m in the firm.
Now, Sheffield’s Trade Union Council is calling on Number 10 to make the buyout a “turning point” for the UK’s troubled steel industry.
Secretary Martin Mayer said: “Finally the Government has seen sense.
“It has been clear all along that privatising such a critically important infrastructure company as steel has been a disaster. In their own admission, the current owners said they were unable to secure funds to invest in the plant and secure the many skilled well-paid jobs that were at risk.
“Privatisation of our steel industry has led to fragmentation, instability and a lack of secure planning and investment in this vital industry, and the loss of thousands of good skilled jobs. We cannot hope to survive as a modern industrial nation without a stable and growing steel industry. The Government’s takeover marks a significant and welcome turning point in the future of steel and we look now to similar plans for other parts of our steel industry such trouble-stricken Liberty Steel left high and dry by the collapse of Greensill's private finance structure.”
Up to 50 per cent of Sheffield Forgemasters revenue comes from defence manufacturing, including supplying parts for Royal Navy ships and submarines.
In 2019, UK steel production fell to eighth in the EU at 7.2m tonnes. Germany was first, at 39.6m tonnes.
The firm’s own union Unite said the buyout was a sign “the Government is waking up to a crisis of its own making”.
The British steel industry has struggled in recent years due to pressure from cheaper competitors in countries such as China and India.
The buyout has been interpreted as the Government shoring up its own defence contracts, but the firm also hopes to grow its commercial operations through projects such a UK nuclear power and offshore windfarms.