Page last updated at 17:14 GMT, Friday, 8 May 2009 18:14 UK

Furnace closure 'would devastate'

By James Lynn
BBC News, Newcastle

Archive photo of Redcar steelworks (courtesy Teesside Archives)

The key to steelmaking at Redcar is the blast furnace, where iron ore is heated and reduced to molten metal.

Should the furnace close, production of steel would be impossible, and it would probably mark the demise of a local industry that is over 150 years old.

Iron ore is no longer mined in the area, but is shipped to the facility from around the world.

And although much of the steel made there is sent abroad, North East heavy industry is also a major consumer.

Alastair Thomson, the dean of Teesside University's business school, said the end of steelmaking was a bad omen for any region.

"I think what's quite clear is that when a blast furnace closes down it's rare that it reopens. Once it's gone, it's gone.

"If you go back many years, steel was produced at Ravenscraig near Motherwell.

"The mill there created a product used in the local market. And when the steel went, the cars went and the shipbuilding went.

"My concern is exactly the same thing happening in the North East."

Corus has other facilities in the region, including a pipe mill and a beam mill. But they are consumers, rather than producers, of steel.

Archive photo of Redcar steelworks (courtesy Teesside Archives)
Teesside's steel industry dates back to the 1850s

Mr Thomson added: "Steel is very heavy so you tend to make it near to the industries that need it.

"If you cease steel production then lots of things made in the region that use those materials don't get made there either.

"In the North East it's mainly the automotive and construction industry.

"So as well as the 2,000 Corus jobs at risk, there's a supply chain equivalent to maybe 10,000 people spread around the region."

George Dunning, the leader of Redcar and Cleveland Council, spent 30 years working in the steel industry.

He said: "When they told me about the closure this morning shivers went down my spine.

We are not prepared to reconcile ourselves to inevitable closure
Business Secretary Peter Mandelson

"We've had the threats hanging over the Teesside steel industry for many years, but today is like being hit by a mini earthquake compared to what's happened in the past.

"I was made redundant from the steel industry in 1994, so I'm afraid I have first-hand knowledge of the damage and misery it can cause to families.

"All I can say is that this council will be here to assist any steelworker who faces losing their job."

Teesside's steel industry dates back to the 1850s when iron ore was discovered in the Cleveland Hills near Eston.

As a result, iron gradually replaced coal as the lifeblood of the area.

In its heyday, the steelworks employed more than 40,000 people.

In 1967, the steelworks were nationalised to become the British Steel Corporation, and resources were concentrated into one blast furnace at Redcar.

Archive photo of Redcar steelworks (courtesy Teesside Archives)
The steelworks faced competition from the US and Japan

But competition from the US and Japan led to the first redundancies.

The corporation became British Steel in 1988, and, in 1999, it merged with Dutch company Hoogevens to become Corus.

Hundreds of workers took voluntary redundancy or early retirement, while thousands more were made redundant over the years.

At the moment, the plant employs 1,920 people.

Tony Sarginson, from the Engineering Employers Federation in Washington, Tyne and Wear, said the latest announcement was a big psychological blow.

"On the back of all the bad news we've had it's still one of the bigger companies.

'Potentially devastating'

"The worry for us is that when you close an operation like that down, with all the cost implications, will it ever reopen again?

"When you do close facilities like Corus, it's not as easy as just switching them off and back on again."

Business Secretary Peter Mandelson has reacted angrily to the proposed closure, prompted by the pull-out of a consortium which buys about three-quarters of Redcar's steel.

He said: "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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