Corus to cut 1,700 jobs in Teesside

Steel group fails to secure rescue plan after losing major contract in April

The UK steel group Corus is to close operations in Teesside, triggering 1,700 job losses, after a consortium of buyers pulled out of a major contract earlier this year.

Corus, which is owned by the Indian group Tata Steel, has been exploring various options to salvage the plant, including selling all or part of it, and forging industrial partnerships in recent months. But after a rescue plan failed to materialised, the management yesterday said it could no longer continue to support the plant's losses and moved to "mothball" parts of the business. Workers at the plant were informed of the scale of the job cuts yesterday morning, which bring the total losses announced in the UK by the company this year to 6,700.

Kirby Adams, the chief executive of Tata Steel Europe, said: "We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community."

Lord Mandelson, the Business Secretary, said he shared the bitter disappointment" of those affected, saying the Government had been working with Corus all year to resolve the situation. "Finding a longer term solution, I'm afraid, has eluded us," he said. He pledged the Government's help for the individuals affected, including potential retraining schemes.

The crisis erupted in April after four international steel slab buyers pulled out of a deal signed in 2004. The Italian group Marcegaglia; Dongkuk Steel Mills of South Korea; the Swiss-Italian Duferco Participations and Alvory, a subsidiary of Ternium in Luxembourg, had agreed to buy 80 per cent of the Teesside plant's production until 2014.

Corus failed in a legal attempt to get the consortium to fulfil its obligations, but is seeking hundreds of millions of pounds in damages in a case that could drag on for years. Mr Adams said yesterday the companies that had walked out should see the effect on Teesside and "hang their heads in shame".

"Since the consortium broke this legally binding agreement, from which it made an estimated $800m profit, Corus has been diverting internal orders to Teeside Cast Products," the group said. It has also been securing external orders "in a bid to keep the plant open while an alternative future for the plant was sought. This has cost the company about £130m".

Corus said operating a plant that makes 3 million tonnes of merchant slab a year was without a long-term strategic partner was unsustainable. "With the global financial crisis, overcapacity in steel and decline in manufacturing activity, the interest in a facility like this at this moment is simply not here," said Mr Adams.

The Redcar Blast Furnace, Lackenby steelworks and the South Bank Coke Ovens will all be mothballed, with operations ceased but facilities maintained in readiness for a possible restart, at the end of next month.

The group said the job losses from the partial mothballing were 600 fewer than had been envisaged earlier in the year. Corus will keep the Redcar Wharf, Redcar Coke Ovens and some of the power-generating units open. It said there would still be a "substantial presence" in the Teesside area, with a staff of more than 2,000 people.

News
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Life and Style
fashionLidl to launch a new affordable fashion range
News
news
Arts and Entertainment
music
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
people
Life and Style
techApp to start sending headlines, TV clips and ads to your phone
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Asset Finance Solicitor

Highly Competitive Salary: Austen Lloyd: CITY - ASSET FINANCE - An outstanding...

HR Analyst - Banking - Bristol - £350-£400

£350 - £400 per day: Orgtel: HR Analyst - Banking - Bristol - £350 - £400 per ...

Techincal Accountant-Insurance-Bank-£550/day

£475 - £550 per day + competitive: Orgtel: Senior Technical Accountant-Insuran...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment