Steel giant Corus is putting up £1.5m to help re-train workers hit by the closure of its Teesside Cast Products (TCP) plant at Redcar.
The company was discussing match-funding from the government for the £3m “Retention of Skills Programme”, but talks have been suspended because of General Election purdah. In the meantime, Corus has committed its half of the funding and more than 200 people who were slated for imminent redundancy are eligible for training schemes and remain on the books, the company says.
But the programme still needs government backing. “We are intending to do our bit but there is still a decision needed from the new government about whether to back the plan,” a spokesman for Corus said.
Mothballing started at TCP in February, following unsuccessful attempts to sell the plant after a European consortium contracted to buy the majority of its output walked away part-way through the long-term deal. The news was met with dismay from the local community and anger from trade union groups.
Originally, Corus had anticipated as many as 2,300 redundancies from the closure. The figure is now expected to be less than 1,500, more than half of whom have already left the company. Precisely how many people will be affected is still uncertain, but the number is falling all the time, Corus says. Some workers have been retained to run the coke-making furnaces that are still running at TCP in Redcar. Others are being “cross-matched” and given jobs in other parts of the business.
“The point of the £3m programme is that it buys three to six months in which hopefully we either find a buyer for the plant or we find other cross-matching opportunities,” the spokesman said.
Corus subsidiary UK Steel Enterprise launched an £8.3m scheme in early March to assist workers hit by the closure of TCP. The aim is to support former steelworkers who want to set up their own businesses and the regeneration fund offers grants and loans to start-ups. One early participant in the scheme is setting up a health and safety consultancy, another a home and garden maintenance business.
The future of TCP is still hanging in the balance. The main blast furnace and steel making facilities are now closed. But Corus has kept open furnaces used to turn coking coal into coke. Margins are currently such that the plant is making a profit – but at the mercy of fluctuations in market prices. Attempts to sell the plant are on-going. Corus refuses to comment on whether it is or it not there are any active discussions with potential buyers, although it has appointed an investment bank to look after the process.
There have been several approaches since mothballing began two months ago. Not all have been credible, but a consortium led by local entrepreneurs Chris Musgrave and Paul Weavers put in a formal purchase offer in March, backed by a syndicate of investors led by private equity group Rutland Partners.
Meanwhile, reports in the Indian press suggest that Corus’s parent company – Tata Steel – may be re-thinking plans to sell the plant because high prices for raw materials such as iron ore and coal are putting off potential buyers.