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Page last updated at 13:07 GMT, Monday, 13 July 2009 14:07 UK
Corus Teesside - A fight for jobs
Redcar Steelworks
Redcar Steelworks has dominated the Teesside skyline for decades.

In May 2009, steelmaker Corus announced plans 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.

The next month, Corus announced plans to cut 428 jobs at its other company on Teesside, the Long Products Division.

The closures would mean an end to 150 years of steelmaking on the Tees.

At one time more than 100 blast furnaces lined the banks of the River Tees, providing employment for 40,000 people. In 2009 the final blast furnace found itself facing the possibility of closure and the last 2,000 Teesside steelmakers' futures were again uncertain.

A proud history under threat

Steel on Teesside
Inside Lackenby beam mill.
Articles on the past and present of steelmaking on Teesside.

You can take the story of Teesside steel back to the 16th Century, when the monks of Rievaux Abbey first began to extract iron from the Cleveland Hills.

Since then, the area has been responsible for some of the world's greatest bridges, crossing the Yangtze, the Nile, the Bosporus and the famous Victoria Falls Bridge over the Zambezi River.

You can add to that specialist steelwork for modern buildings like Canary Wharf and the new World Trade Centre in New York. In 1997, Governor Chris Patten officially handed over Hong Kong to China in a lavish ceremony at the new Convention Centre, built by Teesside steel fabricators.

The arch over Wembley Stadium is stuffed with Middlesbrough football shirts, a mark left by the specialist steelworkers who made it. Similarly, Teessiders talk about how the Angel of the North has, inscribed inside it: "Built for Geordies, by Teessiders". Even Winston Churchill's armoured underground war room was built from Teesside steel.

Managing the decline

Though UK steelmaking has been in trouble for decades, the events that led to Teesside's particular vulnerability to worldwide recession at the end of 2008 can be traced back to 2003.

At that time, Corus (formed by a merger of British Steel and Dutch steelmaker Hoogovens after the 80s and 90s saw a steep decline in UK steelmaking) had run into financial difficulties, posting annual losses of £458 million.

The Teesside plant faced the threat of closure, amid allegations that the Dutch-dominated company was prepared to sacrifice British plants to protect the ailing aluminium arm of the business in Holland.

Breathing space

The Redcar 'war room'
Corus beam mill at Lackenby
How a small team tries to find new customers for Teesside steel

The plant was only saved when a deal was struck to establish Teesside Cast Products, owned by Corus, but responsible for finding its own buyers for its steel. Essentially, Teesside was left to sink or swim by itself.

Alistair Arkley was part of the Steel Task Force on Teesside that brokered the deal. "Corus was losing lots of money and it was very much Dutch controlled and there was a feeling that they would take a view that shutting a British plant wouldn't matter so much. I think that at the time we were pretty pleased to have achieved what we did and were pretty pleased how it went after that."

For the next four years, as a surge in demand from fast-growing economies like China and India sent steel prices rising, Teesside Cast Products flourished, signing up a consortium of four companies to buy 80% of its steel, with the remaining 20% going straight to Corus' own plants.

Running a blast furnace in Britain is not cheap and Teesside couldn't compete with emerging steelmakers in Asia on price, concentrating instead on producing specialist grades of steel.

The tide turns

May 2009: March for jobs
Corus Steelworkers march to save their jobs.
May 2009: Corus workers from Teesside led the national March for Jobs through Birmingham City Centre

The financial collapse of 2008 hit the steel industry hard and the deal struck to save Teesside in 2003 left it as a small player with little capital to see it through. Teesside was vulnerable. By the end of 2008, shifts had been cut and in January 2009 Teesside Steelworks went up for sale.

Chris Houlden, Senior Consultant in Steel at the Commodities Research Unit said, "Demand was particularly strong until the middle of 2008 due to China and other nations as well, like Brazil and India, and that supported both the consumption of finished steel products and also for slab.

"But steel is particularly sensitive to macro-economic circumstances, so in the economic downturn, steel consumption has responded particularly drastically."

Steel plant may shed 2,000 jobs

In May 2009, with demand for steel plummeting, the consortium that had signed up to buy Teesside's steel announced it was pulling out of the ten year deal early, prompting Corus to announce that it wanted to mothball the Teesside plant.

That statement put around 2,000 staff and 1,000 contractors' jobs in jeopardy and potentially called and end to steelmaking on Teesside for the first time in a century and a half.




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