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Corus - Past, Present and Future



Ian Reeve
By Business & Industry Correspondent Ian Reeve
BBC Look North

"Where have all these people come from?" asked the Look North cameraman of the packed room in Corus's Steel House.

About ten camera crews and 30 journalists were squeezed into the small area, awaiting a press statement from the Business Secretary Lord Mandelson.

The reason for the excessive numbers was the feeling that he would have some good news about the mothballing of the Teesside Cast Products plant.

"He might even announce a buyer" - was one of the more excitable predictions.

However, if that was what the majority wanted to hear then they were disappointed.

Linda Robinson demonstrates outside Corus
Demonstrators gathered outside of the Corus plant

Lord Mandelson had met with the company and unions but had been told the mothballing was going ahead.

There was some revelation in that over two million pounds has been allocated to allow Corus apprentices to finish their training, albeit from a pot of money previously announced.

But beyond that, Lord Mandelson spent a deal of time stressing the difference between closure and mothballing. Journalists must not describe what is about to happen at Teesside cast products as closure. Mothballing offers hope that the blast furnace and its allied plant can re-open, either when the market swings up or when a buyer materialises:

"Mothballing is not the same as closing. This plant will be maintained. Its ability to re-open and resume operation will be protected by the company, and I have that assurance from them," he said.

So what are the prospects of mothballing being reversed?

Corus does have experience in bringing blast furnaces back to life.

Recently one in Wales and one in Holland have been put back on line. It's expensive - possibly about £50 million - but can be done. And if the market warrants it - say the price of slab steel rises - then the company would be able to act quickly.

However, for any prospective buyer of the blast furnace the cost could be prohibitive.

That's why the 'mystery' consortium, which has at this late hour expressed interest in taking over Teesside Cast Products made it plain that the mothballing process had to stop immediately for it to further its interest.

That and the government paying workers' wages for 90 days, presumably while the consortium carried out its due diligence - looking over the books. Surely a sticking point for the government.

So is the consortium credible?

After initial scepticism I believe the individuals do have credibility. It is being headed up by the venture capitalist Jon Moulton, whose previous company, Alchemy, tried to buy the ailing Rover car maker.

It also includes a corporate financier steeped in the steel industry.

The problem the consortium faces, and surely can't overcome, is an apparent lack of interest from Corus in dealing with it.

Perhaps the steelmaker doesn't want to string its workforce out any more. After all it's now nine months since it said mothballing was a possibility.

Credibility the consortium may have. But that's no good without the will to do a deal.




SEE ALSO
Corus: Consortium pulls out
24 Nov 09 |  People & Places

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