The new chief executive of the Anglo-Dutch steelmaker Corus warned yesterday that it could not rule out further cutbacks as its customers in manufacturing struggled with falling order books.
Tony Pedder, who currently heads the group's strip products division and takes over the £500,000-a-year chief executive's job on 1 September, said it was difficult to gauge what impact yesterday's surprise quarter-point cut in rates would have.
Corus caused a storm earlier this year by cutting 6,000 jobs in its UK operations, closing its Ebbw Vale tinplate works and ending steel production at the Llanwern plant in south Wales.
Mr Pedder said: "We hoped we had drawn a line in the sand but you can never rule out the need for further action.
"You are only as good as your customer base and although we think we have done what is necessary to cope with the economic situation, we are dependent on the performance of our customers. The lack of growth in manufacturing is well-known and well-documented."
Corus lost £1.1bn last year after taking a £1bn charge to pay for the redundancies and a 3 million tonne reduction in steel output. This was designed to bring UK production into line with UK demand, which has shrunk by 15 per cent since 1989. Since the cuts were announced in February, the outlook for UK manufacturing has deteriorated further.
A lifelong steel man who joined the industry in 1972, Mr Pedder replaces Corus's two former joint chief executives, John Bryant and Fokko van Duyne. They were sacked last December after the chairman, Sir Brian Moffat, lost patience with their failure to make progress following the merger of British Steel and Hoogovens of the Netherlands to create Corus 14 months earlier.
Mr Pedder, 52, beat off competition for the top job from a number of outside candidates.
Sir Brian, who took over as executive chairman while the search for a new chief executive was conducted, will revert to his position as part-time chairman on a salary of about £300,000.Reuse content