Page last updated at 12:02 GMT, Friday, 8 May 2009 13:02 UK

Steel plant could shed 2,000 jobs

The Corus plant on Redcar

Steelmaker Corus is set to mothball its Teesside plant threatening the jobs of nearly 2,000 workers.

Workers at the Teesside Cast Products (TCP) plant in Redcar were told the news ahead of a 90-day consultation.

Owner Corus said the development had become "unavoidable" because of the early end to a contract with four international steel slab buyers.

Steel union Community expressed "outrage" and said it would work to secure steelmaking on Teesside.

Corus said the development was because of the termination of a contract by four international slab buyers which had made the Redcar plant "unviable".

The agreement was signed in 2004 and committed the consortium to buy just under 78% of the plant's production for 10 years.

Those involved in the agreement include Marcegaglia SpA, Dongkuk Steel Mills Co Ltd, Duferco Participations Holding Ltd and Alvory SA.

Dedicated employees

Corus chief executive Kirby Adams said: "I am extremely disappointed that the consortium members have seen fit to take this irresponsible action.

"Their unilateral termination of a legally binding 10-year contract could bring to an end a fine heritage of steelmaking at Teesside.

Teesside Cast Products boss Jon Bolton says his priority is speaking to workers

"We regret the distress their action will cause TCP's dedicated employees, who have worked steadfastly in the interests of the consortium."

Corus has started discussions with the 1,920 employees at the plant about what could be done to mitigate the impact of mothballing.

The steelmaker said any such decision was likely to lead to a significant number of redundancies.

Michael J Leahy, general secretary of the steelworkers' union Community, said: "This is appalling news.

"We cannot believe that the consortium is taking such irresponsible action that will have a devastating effect on our members and the whole community in Teesside.

"The consortium has made this disgraceful move, knowingly jeopardising the livelihoods of thousands of workers who are the innocent victims of this.

"These multi-nationals have reaped hundreds of millions of pounds in profits and are now walking away from their legal, moral and social responsibilities."

Union spokesman Geoff Waterfield says there is a mood of disbelief on Teesside

Redcar MP Vera Baird said: "I'm absolutely furious. This consortium is happy to walk away, after our workers have been providing fabulous quality steel that has made the company a lot of money.

"It is an appalling decision and I urge the consortium to come back to the table.

"My thoughts are with the men and women who work at the plant. Redcar is a fighting community, and they can rest assured that we will do all we can."

'Unacceptable development'

Anglo-Dutch firm Corus, owned by Indian conglomerate Tata since 2007, said it was using all legal means to ensure the terms of the contract were enforced and that the four members of the consortium met their contractual obligations.

The company said it would continue to explore any alternative options that might secure a viable future for the TCP site and its employees.

Business Secretary Peter Mandelson said: "It is essential that Corus does everything it can legally, and with the government's assistance, to reinstate the Offtake Framework Agreement.

"It is unacceptable that such a development should threaten jobs on such a scale, with such a potentially devastating impact on the area.

"The government stands ready to do what it can to support the company. We are not prepared to reconcile ourselves to inevitable closure of this plant."

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