1,700 jobs go as Corus mothballs plant

Steelmaker Corus has confirmed it will curtail production at its Teesside Cast Products factory, putting 1,700 people out of work.  It had been announced in May that the 150-year-old Redcar plant was to be mothballed.  The plant had been at risk since a 10-year deal suddenly fell through.

Business Secretary Lord Mandelson expressed his disappointment, saying it would be a "very difficult time for the workforce".

The deal that had fallen through was signed by an international consortium, led by Italian steel specialists Marcegaglia, in 2004, and committed the consortium to buy just under 78% of the Redcar plant's production.
 
Corus said that 1,700 jobs would go, which is about 600 fewer than had been previously thought. It says 2,300 people work at the facility.

"The steel industry overall has suffered an unprecedented fall in demand in the global recession," Lord Mandelson said.

"The government worked hard with all parties following the cancellation of the main supply contract in May to continue the agreement but a commercial solution could not be found."

Devastating news

Thousands took part in a march in July calling on the government to help the Corus steel plant, after workers were put on 90-day redundancy notice.

Corus said it was partially mothballing the plant, shutting its blast furnace, its steel melt shop - which makes slab - and one of the two coke ovens.  It will be keeping open the wharf facility that handles imports and shipping, the other coke oven and some of the power generation capacity.

The company said operating a merchant slab plant with output of three million tonnes a year was "not sustainable" without a long-term partner.

"This is a dark day for British manufacturing," said Derek Simpson, joint general secretary of the Unite union.  "Unite will do everything possible to prevent this closure from going ahead. The government must now act to save Teesside as decisively as it acted to save the banks last year."

Shame

Kirby Adams - the Europe chief of Tata Steel, which owns Corus - confirmed the plant's closure to staff on Friday.

He said that Corus had funded the business since May, and at one point, it looked very likely that the plant would close in August.  "Corus is not in a position where it can bankroll a loss-making business such as Teesside," Mr Adams said in a press conference. "We are acutely aware that this will be devastating news for our employees, our contractors, their families," he said.  "All four members of the consortium should look at this and hang their heads in shame."

Corus has made about 1,000 job cuts since January, and announced it was cutting almost 2,000 more jobs at its UK plants - including Teesside as well as Scunthorpe and Rotherham - in June.

"This is a gut-wrenching disappointment after all the effort and the hopes won by the sheer doggedness of our workers," said Redcar MP Vera Baird.  "I'm furious that, after our workers won months of export orders, Corus has not been able either to get a longer term contract or to clinch a deal for the sale of the plant."

Roger Manser, managing editor of Steel Business Briefing, believes that new steel jobs would only be created in the North East when global demand for steel revived, which might not happen for between 12 and 18 months.

The Anglo-Dutch firm Corus was bought by India's Tata Steel in 2006.

Posted at 07:51PM Dec 04, 2009 by Kelly Board in The Economy  |  Comments[0]