Aerospace calls on government to support Liberty Steel

The aerospace industry is calling on the government to intervene to secure the supply of specialty steel products it relies on amid scrambles to fund Liberty Steel.

Liberty Steel's owner, Sanjeev Gupta, is urgently seeking funding following the collapse of Greensill Capital, its former key lender. Liberty Steel is the third largest steel producer in the UK, employing around 3,500 people, and the broader steel empire GFG Gupta employs around 35,000 people worldwide.

The ADS Group, which represents aerospace and defense companies including Airbus and Rolls-Royce, said its members were particularly concerned about maintaining supplies from two Liberty Steel sites in Rotherham and Stokesbridge.

Two factories, both in South Yorkshire, produce high-strength steel that resists corrosion, making it a key material for jet engines, landing gear and other parts such as propellers on small aircraft.

Kevin Craven, the interim CEO of ADS, wrote to Kwasi Quarteng, the business secretary, asking him to "urgently intervene to resolve the situation" before scarcity and cost increases, according to a copy of the letter seen by the Guardian.

“There are very few alternative sources of these steels for the aerospace industry in the world, and production is limited,” the letter said. "It is therefore expected that once stocks are depleted, there will be a major problem with the availability of these special steels."

The companies provided steel suppliers, including Liberty, with customer guarantees, giving advance notice of orders and expediting payment for products, ADS said. The letter was first reported to Sky News.

Jet engine maker Rolls-Royce has placed a bulk order with Liberty Steel to provide it with enough steel to last the rest of the year. The order allowed the company to resume production in Rotherham, according to union sources, after workers were laid off to save money.

Quarteng indicated that the government is considering options to intervene to save Liberty Steel if it falls under the control of the administration or is eliminated. On Tuesday, he said that he "would very much like these assets, which are good assets, to continue working."

However, Quarteng has already turned down a request for a £ 170m loan from Gupta, citing concerns about Liberty's opaque corporate structure. There are also concerns about the management of the company, as questions have arisen over the loans provided by Greensill, which were linked to accounts for "alleged" work with companies that were not affiliated with Liberty. Accounts of Liberty subsidiaries that own