1,700 jobs expected to go at steelmaker Corus
Friday, 04, Dec 2009 06:30
By Sarah Garrod.
The steelmaker Corus has said it will have to cut 1,700 jobs after reducing its production at its Teesside Cast Products (TCP) factory.
Corus said it was sad the decision had been made "unavoidable", following an announcement in May that due to an international consortium's breaking of a binding contract the company was mothballing some of its facilities.
In a statement Corus said TCP's Redcar Blast Furnace, Lackenby steelmaking and the South Bank Coke Ovens will be mothballed at the end of January 2010. Corus intends to keep open a number of operations, including the Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity.
The partial mothballing will result in the loss of about 1,700 jobs, around 600 fewer than envisaged earlier this year.
But the Community Union has said the decision could have "disastrous consequences".
The union's general secretary Michael Leahy said: "Tata Corus are making a premature decision to close TCP despite having orders on the book to the end of the year. There is still time to save TCP as a going concern and Tata Corus have a moral and social obligation to Teesside steelworkers who have moved heaven and earth to rescue TCP and save their jobs.
"Community Union are calling on Tata Corus to reverse this decision and continue to support the workforce on Teesside. Community will leave no stone unturned to find a solution which will secure the future of steelmaking on Teesside.
"To that end, we are seeking urgent talks with the government to discuss what assistance they can provide to preserve the steelmaking infrastructure of Teesside and prevent a community being devastated."
Corus said they would continue to have a substantial presence in the Teesside area, employing more than 2,000 people at operations in Hartlepool, Skinningrove, the Teesside Beam Mill and Teesside Technology Centre.
The decision to partially mothball TCP follows "strenuous efforts" by Corus over the past eight months to secure a long-term future for the plant after the failure of four international slab buyers to fulfil their obligations under a ten-year contract that they signed in 2004. This contract committed the consortium to buying about 80 per cent of the plant's production for ten years.
The statement from Corus said that since the consortium broke this legally-binding agreement, from which it made an estimated $800m profit, Corus has been diverting internal orders to TCP. The company has also been securing external orders on an ad-hoc basis in a bid to keep the plant open while an alternative future for the plant was sought. This has cost the company about £130 million.
Chief executive Kirby Adams said: "We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community. We extend our sincere gratitude to all of them, as well as to the management team and the trade unions on Teesside, who have all worked night and day to try and avoid this outcome.
"This is the last thing we wanted and we feel deeply about what is happening. Sadly, it has become unavoidable, through no fault of our people on Teesside."
Corus added they will work with government agencies to do "everything it can to ensure that the employees affected get access to the support and assistance available they need during this difficult time".