Page last updated at 18:19 GMT, Thursday, 11 December 2008

Corus unions reject pay cut deal

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Producation at Corus' Llanwern steelworks has been reduced.

Unions representing the 25,000 UK workforce of steelmaker Corus have rejected the firm's proposal that staff take a 10% pay cut.

While the Community, Unite and GMB unions said talks would continue with Corus, they said they needed more details of the firm's plans for 2009.

With Corus saying it needs to cut costs due to falling steel sales, the impasse raises the fear of job losses.

There are concerns that Corus' Llanwern facility in South Wales may close.

This site near Newport employs 1,000.

'Demanding information'

"The company's proposals for a 10% pay cut were one of a range of options which so far have been rejected by the unions," said Community, Unite and GMB in a joint statement.

"Before there is an agreement on the future of the 25,000 employees, the unions are demanding that Corus makes clear its intentions for 2009."

A Corus spokesman told the BBC that "talks were ongoing and everything is still on the table."

Michael Leahy, general secretary of the Community union, told the BBC earlier in Thursday that Corus was committed to avoiding closures and job losses, if at all possible.

"We realise that there's been a global downturn in production of steel and people wanting steel - in fact we realise there's been over 40% reduction in the order books for steel in Corus UK and Europe-wide," he said.

State aid request

Both steel sales and prices have fallen sharply since the summer due to the deepening economic downturn.

Construction and carmaking, two steel-intensive industries, are among those to have suffered.

Earlier this month, Corus, the Anglo-Dutch subsidiary of Indian steel giant Tata, asked Gordon Brown for UK government aid.

The firm's head Philippe Varin said state help was needed to allow firms to avoid redundancies amid falling output.

Corus axed 500 jobs from its UK workforce of 25,000 last month.

The firm, which was bought by Tata Steel for $12bn (8bn) in 2007, plans to reduce its European output by 30% by March.

In addition to Llanwern, Corus also runs sites at locations including Port Talbot in South Wales, Scunthorpe in North Lincolnshire and Rotherham in South Yorkshire.



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