Job losses leave Corus workers 'devastated'

Workers in one of the UK's biggest steel-making areas were dealt a savage pre-Christmas blow today with news that a giant plant is to be mothballed with the loss of 1,700 jobs.

Corus said it had been unable to secure the long-term future of the Teesside factory, blaming an international consortium for "walking away" from a 10-year contract in April.

Corus chief executive Kirby Adams broke the grim news to managers and union officials at the plant before launching an angry attack at the consortium, saying the four firms involved should "hang their heads in shame".

Union leaders said the announcement was "devastating" for the workers and the region and called on the Government to take urgent action to try to save the jobs.

Workers leaving the plant were bitter and angry at being told they were being made redundant just weeks before Christmas.

One said: "If we were as poor at making steel as they are at managing, we would have closed long ago."

Another raged: "The bankers get bailed out but we get nothing on Teesside."

Kate Owen, owner of a snack van outside the gates, said the closure would devastate Redcar, warning: "If all these people are out of work, it is going to be like a ghost town."

Michael Leahy, general secretary of the Community union, said Corus, which is owned by Indian giant Tata, had made a "premature" decision" because it had orders on its book to the end of the year.

But Mr Adams said the factory, which has been producing steel for more than 30 years, had become "unsustainable" without a partner, incurring losses of £130 million between April and September.

Corus had worked "night and day" and officials had travelled the world trying to find new partners, he said, adding: "I am personally very sad we have reached this point. I did not join Corus to close plants. Teesside is renowned for the quality of its products and has a very fine workforce.

"But for TCP to continue operating, what Corus requires is sufficient and profitable slab demand and the realistic prospect of a strategic partner to secure its future.

"We have held extensive talks with prospective partners. The international slab market is now too weak and the competition too severe for Corus to support a plant of such a size and risk. It has become an unsustainable business for Corus alone."

Mr Adams said the only piece of good news was that the number of job losses was 600 fewer than originally feared because the firm will keep some of its operations open.

Steel processing around the world was under pressure, with an estimated 300 million tonnes of excess capacity, said the Corus chief, who took up his job just two days before the consortium terminated its contract, which involved buying around 80% of the plant's production.

The cost of mothballing the plant and redundancy payments will be £80 million.

Corus stressed it was not mothballing all of the plant and will continue to have a substantial presence in the Teesside area, employing more than 2,000 workers in Hartlepool, Skinningrove, the Teesside Beam Mill and Teesside Technology Centre.

Prime Minister Gordon Brown's spokesman said: "We have worked hard with all parties since the cancellation of a main supply contract in May and we are very aware that Corus management have worked very hard to try to keep the plant open.

"There are things like training support which we can offer."

Business Secretary Lord Mandelson said: "The steel industry overall has suffered an unprecedented fall in demand in the global recession.

"It is very disappointing that Corus have not been able to find a long term solution to the difficulties they flagged earlier this year, and this will clearly be a very difficult time for the workforce.

"The Government worked hard with all parties following the cancellation of the main supply contract in May to continue the agreement but a commercial solution could not be found."

Keith Hazlewood, national officer of the GMB union, said: "This is devastating news for Teesside and shows how fragile the recovery from the recession is proving to be.

"What a terrible contrast between the 1,700 workers losing their jobs on Teesside and the multi-millionaire bankers continuing to gorge themselves at the expense of the tax payers."

Unite's joint general secretary, Derek Simpson, said: "This is absolutely devastating news for the men and women who work at Teesside. This is a dark day for British manufacturing. Unite will do everything possible to prevent this closure from going ahead."

Redcar and Cleveland Council leader George Dunning said: "As a former steel worker at Teesside Cast Products in the Seventies and Eighties, it is heartbreaking to hear such devastating news."

James Ramsbotham, chief executive of the North East Chamber of Commerce, said: "The challenge we now face is to bring new industry which will provide job opportunities in the Tees Valley for the next 100 years."