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Business News

2,000 jobs go in 'devastating' blow to steel industry

The steel industry was hit by a fresh jobs blow today when Corus announced plans to axe more than 2,000 posts following a slump in demand.

Plants including Rotherham, Stocksbridge and Scunthorpe will be hardest hit by the latest cutback by the steel giant, which has already axed thousands of jobs this year.

The new cuts will hit the firm's long products division, which supplies steel to the construction industry, one of the worst affected by the recession.

Unions described the job losses as "devastating" and called on the Government to offer help to the industry.

The company said in a statement: "Corus has already made significant cost savings with the support of its employee and union representatives since the downturn began, but several sites have suffered further deterioration in demand for their products.

"This additional restructuring will enable the business to align its production and manning levels with anticipated demand."

Corus said 2,045 jobs were at risk, including 1,500 in the company's production facilities, about 800 at the engineering steels sites, mainly Rotherham and Stocksbridge, about 370 in Corus Tubes in the UK and Holland, and about 375 at downstream rolling and finishing plants in Teesside and Scotland.

The company also announced that it was opening consultations on 500 white collar jobs throughout the Corus Long Products division, the majority at Scunthorpe.

Chief executive Kirby Adams said: "We understand the difficulties these job losses are likely to cause our employees and their families. Any recovery in Europe appears to be some time off, so it is vital that we take this proportionate and responsible action now.

"We have to achieve long-term, sustainable competitiveness in a global and over-supplied steel market and are determined to do so by focusing on the quality of the products and services we offer our customers."

Corus said it would make every effort to ensure as many of the job losses as possible were voluntary, but it could not rule out compulsory lay-offs.

"Redundancy packages and outplacement support services will be available to those leaving the company. There will be full consultations with employees and their representatives throughout the process," said a spokesman.

Corus, owned by by Indian firm Tata, announced earlier this year that it was axing more than 10% of its UK workforce, by cutting 3,500 jobs worldwide, including 2,500 in this country.

The firm announced a series of cost-cutting measures in January, including the mothballing of a mill in South Wales, and restructuring several parts of its business.

The future of 2,000 jobs at the steel firm's Teesside Cast Products have been at risk since four international steel buyers walked out on an agreement with the site in May.

The Community union described the latest cuts as as "devastating" and said there was now a fight on for the future of British steelmaking.

General secretary Michael Leahy said: "It's devastating news for our members and their families in steel communities right across the UK.

"This is bad news on top of bad news - this brings the Corus job cuts for the year to about 4,500 and that's without the threat to thousands of workers on Teesside and potentially more job cuts in the pipeline for Corus Strip UK.

"All this just adds to the misery for steelworkers. Corus needs to decide if it really is trying to be fit for the future or just fit for the scrapheap.

"We have real concerns for the integrity of the British steel industry - we fear its further erosion could fundamentally undermine UK manufacturing.

"The Government must also take action before it's too late. Community will be doing all it can in the coming days and weeks to minimise the job losses, oppose hard redundancies and fight for the future of British steelmaking."

Unite's national officer John Rowse said: "We will be having urgent discussions with the company on this latest announcement but we cannot keep moving from crisis to crisis. It is time for the Government to step up and act.

"While this latest announcement is due to the impact of the global crisis, interim solutions have to be local to the UK.

"The situation for Corus and British manufacturing is too serious to stand idly by. Unless there is urgent support from the UK Government, British manufacturing will come out of recession hamstrung and unable to compete in the world economy."

GMB official John Wilson said: "This is seriously bad news, especially coming on top of the earlier job cuts. We will be seeking urgent talks with the company."

Shadow work and pensions secretary Theresa May said: "This is grim news for the hardworking employees of Corus and reveals how deeply the recession is hurting Britain's economy.

"Labour must focus on getting credit flowing through the economy again, which is why it must adopt our national loan guarantee scheme."