Corus axes 1,700 more jobs as lack of demand forces Teesside closure

Published on Friday 4 December 2009 21:28

STEELMAKER Corus is cutting a further 1,700 jobs after deciding to mothball a major plant in Teesside in the new year.

Europe's second-largest steelmaker, which is owned by Tata Steel of India, has already laid off 4,500 workers in Britain this year, shutting plants to cope with a decline in global demand for steel.

Yesterday it said it will mothball the Redcar blast furnace, Lackenby steelmaking and the South Bank coke ovens in Teesside, after failing to secure a long-term partner for its production.

The future of the Redcar site, which has been operating for more than 150 years, has been in doubt since May, when it was initially feared that up to 2,300 jobs could be lost. Its problems stem from the sudden cancellation of a ten-year contract agreed with four international companies in 2004, under which they were contracted to buy 78 per cent of the plant's production.

Attempts to find a replacement partner to take up the bulk of its production failed, leading to yesterday's decision to shut down production in January.

Corus chief executive Kirby Adams said the company understood that there was "a massive human cost" to the decision, but that the company had been unable to find an alternative.

"We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community," he said.

Adams praised the efforts of the site's staff and their representatives for their work in attempting to showcase the plant since the contract fell through.

"I don't believe there is anything more the unions and the workforce at this site could have done to try to assist to achieve a different, better outcome," he said.

The trade union Community called the decision "premature" and said it would have disastrous consequences for Teesside and the manufacturing base of England's north-east.

General-secretary Michael Leahy said there was time to save the plant as a going concern. He said: "Tata Corus are making a premature decision to close TCP despite having orders on the book to the end of the year."

Business Secretary Lord Mandelson said that despite the best efforts of the government and Corus to keep the operations running, there had been an unprecedented fall in global demand for steel. "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," he said.

Corus said the closure would cost it about 80 million. A smaller coke oven and a wharf at the Redcar site, which employ about 600, will stay open.