Anglo-Dutch steelmaker Corus is to cut 1,150 jobs in the UK, with the prospect of a further 2,200 redundancies in north-east England in the pipeline.
Its chief executive has quit, its share price has collapsed and it made operating losses of £393m in 2002. BBC News Online explains what went wrong.
How did Corus get into such a mess?
Corus has been hit by the double whammy of a high pound and a drop in domestic demand.
It was raking in profits in the mid-90s on the back of a weak exchange rate.
But analysts have accused it of failing to invest in its future while it had the chance.
A botched take-over of Brazilian iron ore giant Companhia Siderurgica Nacional (CSN) last year only added to its woes.
But competition from developing countries, with cheap labour costs and ready access to raw materials, is making life difficult for all European steel producers.
Some predict the European steel industry will eventually be wiped out altogether.
What will happen to the Teesside plant?
It will no longer send the raw steel it produces to other Corus plants in the UK for processing and will have to sell it instead on the international market.
Andrew Page, managing director of Corus' Construction and Industrial branch, has said it will look to sell to Europe, America and the Far East.
Its current plan will run for two to three years subject to financing.
But most analysts believe the plant is only being kept alive until Corus can find a buyer.
Others have said it is remaining open because Corus cannot afford to close it at present.
Wouldn't it have made better business sense to sell - or close - Teesside?
One analyst branded Corus' decision to keep the plant going - but not to use what it produces - "odd to say the least".
He thought Sir Brian Moffat had "fudged" the decision to avoid closing the plant "on his watch".
But Sir Brian, who retires in June, has said he believes the plant has a future.
He said there is a growing market for Teesside's unprocessed "slab" steel, and the plant was already selling it on the open market.
But he warned the plant it would have to cut costs further to stand a chance of survival.
Is management to blame for Corus' ills?
The company has suffered from a slump in demand for steel and ruthless competition from the Far East and elsewhere.
The US has also complicated the picture by slapping punitive tariffs on foreign steel in order to protect its domestic industry.
But that does not entirely explain Corus' £393m loss in 2002, which was, by most accounts, a relatively good year for steel.
As one analyst dryly put it: "Corus' achievement was quite spectacular in managing to lose money in 2002."
So what exactly is Corus' problem?
Corus has been very good at marketing its products, particularly in the UK, and generating returns for shareholders.
But analysts have accused it of failing to have a coherent long-term strategy.
"It's the same old British story," one commented.
The merger with Dutch firm Hoogovens made sense on paper, but there has been a serious culture clash at management level.
Is that why the UK - and not the Netherlands - is bearing the brunt of redundancies?
Sadly, for British workers, the only consistently profitable parts of Corus are outside the UK.
The Dutch board did not want to prop up the loss-making UK operation by selling off its most profitable assets.
That's why it blocked the sale of Corus' aluminium division. That move was upheld by the courts in Amsterdam.
Sir Brian has said the latest round of cuts should leave the Dutch board "well pleased".
Where does Corus go from here?
It badly needs to raise cash - but its options are limited.
It is still in discussions with its bankers about a new three-year loan facility to fund medium-term working capital.
Its current 1.4 billion euro (£0.96bn) loan facility expires next January.
The collapse in its share price, from a high of more than 170p to about 17p, makes it a bad risk for lenders.
Sir Brian has spoken about a possible rights issue.
But even he admits the state of the stock market and Corus' share price would mitigate against that.
The only alternative is to cut costs and hope for an upturn in demand.
Some analysts have suggested that Corus could eventually split in two.
But in the current climate there would be few takers for a reborn British Steel.