Thousands more jobs go as Corus warns of long road to recovery
Friday 26 June 2009
Corus is cutting more than 2,000 more jobs, taking this year's total number of redundancies to 5,500 – nearly 4,500 of which will be in the UK.
Production at the steel group, which has operations in the UK and the Netherlands, is more than 40 per cent lower than last year as global recession devastates demand. The company has already axed 3,500 jobs, 2,500 of them in the UK. But there are few signs of improved orders, Corus says.
Of the 2,045 jobs to go in the latest swathe of redundancies, only around 120 relate to positions in the group's Dutch operations. The remainder will be spread across the Long Products business in the UK, including engineering steel sites at Rotherham and Stocksbridge, rolling and finishing facilities at Teesside and in Scotland, and the Tubes division. Some 500 office jobs will also go in Scunthorpe.
Kirby Adams, the chief executive, 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."
Tata Steel, Corus's Indian parent, yesterday reported full-year profits down 60 per cent to R49.5bn (£623m).
But reduced production and massive redundancies are not Corus's only problems. The group is locked in talks with a consortium of four customers of its Teesside Cast Products (TCP) division who last month pulled out of a long-term agreement to take 80 per cent of the plant's output. Without the orders, TCP is expected to be mothballed by August.
Two of the four customers – Marcegaglia and Dongkuk – also pulled out of a plan to buy the factory. Mr Adams said yesterday that Corus is talking to other possible buyers, but the prognosis is not good. "A couple of weeks ago Marcegaglia and Dongkuk said they were no longer intending to buy TCP and that has enabled us to commence conversations with other companies," he said. "But it's a long shot we will come up with a buyer in the next 60 days."
Pat McFadden, the Business minister, yesterday claimed his department is doing all it can to help the beleaguered steelmaker, including offering £5m-worth of training support to help keep jobs. "During discussions with Corus they said the critical measures the Government can take are continued fiscal stimulus to support demand," Mr McFadden said. "That is exactly what we are doing."
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