Outlook: The Corus line begins to sound more and more desperate

Leeds United; B&B calling

Heard the one about the steel company that didn't have enough money to pay for its own cost-cutting programme? The Corus line gets more desperate and more bizarre with every rendition but yesterday's rather takes the biscuit. There is, it seems, enough money to fund the new executive bonus scheme, which handily no longer relies on the company making profits, but not enough to finance the latest 1,150 job cuts and extra capacity reductions. The latest down-sizing exercise will cost £250m, but in order to afford it Corus will have to sell off even more bits of the business. The alternative is to raise new money from the equity markets which is a non-starter with Corus virtually reduced to the status of a penny stock, or from the banks, which looks equally challenging when the business is already groaning under £1.2bn of debt.

Shareholders attending yesterday's annual meeting at, of all places, the TUC's London headquarters, did not know whether to laugh or cry. Still, you have to hand it to Sir Brian Moffat, the outgoing chairman, for sheer audacity. Sticking two fingers up to the workforce in the very citadel of organised labour, was some swansong as he heads for his £300,000-a-year pension.

The chairman was told he ought to be wearing sackcloth and ashes but turned up instead in a Saville Row suit while the new French chief executive, Philippe Varin, did not bother to make an appearance at all because technically he does not start to earn his £1.7m pay packet until tomorrow.

Corus (website motto: The Future in Metal) has a past, but does it have a tomorrow? Since the ill-fated merger of British Steel and Hoogovens four years ago, Corus has been almost as big a corporate disaster as Marconi. Some 10,000 jobs have disappeared into the furnace, UK steel making capacity has been cut by more than a third and the share price has been shredded. A line was famously drawn in the sand when the company cut 6,000 jobs and ended steel making at its Llanwern integrated plant two years ago. The aim, supposedly, was to shrink capacity to fit the declining demand from an ever-smaller manufacturing base. Now the axe is back and this time the workforce in south Yorkshire is feeling the touch of cold steel.

The bloodletting will almost certainly not end with Corus's Sheffield engineering steels business for the blackspot has been attached to the North-east as well where the Teesside integrated plant will have to scrape a living by feeding slabs to the international market. If history has taught Corus anything, it is that there are plenty of other countries out there with a fraction of the labour costs that can supply the commodity steel market. So Teesside looks as good as closed and along with it another 2,200 direct jobs.

From five integrated sites at the time of privatisation employing 60,000 people and producing nearly 20 million tonnes of liquid steel, Corus will have more than halved in size.

Whether it has the critical mass to survive at all is a moot point. If and when the new management team stop the haemorrhaging in the UK carbon steels business and succeed in refinancing the business, a sale of the rump to anybody who is interested looks like the next step.

Maybe Britain no longer needs, or even deserves, a steel industry of its own. But when you consider that tiny Luxembourg manages to be the home of the world's biggest steel maker, then you have to wonder how many of Corus's wounds have been self-inflicted.

Leeds United

The plight of Leeds United is a stark reminder, if one were needed, that football fans should stick to watching the game rather than investing in it. When the club was in its pomp the supporters had a bizarre habit of standing bare chested in freezing temperatures simply chanting "Leeds, Leeds Leeds." Now they risk losing their shirts in more ways than one because Leeds stands financially naked and on the edge of calling in the administrators. Drowning in £79m of debt and losing money at the operating level the corporate turnaround specialists the club hired yesterday from Ernst & Young could turn out to be one of the more sensible signings.

The plan is to raise up to £15m which is nice start but still won't reduce borrowings to a manageable level. So more cost-cutting is going to be necessary. They could make a start with the car pool which, incredibly once provided transport for 76 of the club's 250 staff. This scatter-cash mentality explains why the club completed a boardroom clear-out yesterday with the finance director following the former chairman and the managing director in taking an early bath. Allan Leighton remains as a non-executive if only to act as a guide through the wreckage. Though if the firesale of players continues at its recent rate he could be getting his boots on before long (he was a rather useful five a side player when at Asda).

Leeds' dramatic fall from would-be Champions League contenders a couple of seasons ago to financial basket-case is instructive. First, it shows the idiocy of spending money you haven't got, a basic tenet of business but one which has been lost on most football clubs until recently. The club is now being forced to jettison players as fast as it is losing matches and if the club is relegated from the Premiership next month then administration looks all but inevitable. If they can bear to, institutional shareholders such as Schroders, Warburgs and Jupiter Asset Management will be watching this weekend's away game at Arsenal through their fingers.

B&B calling

For sale: Middling-sized building society turned bank. Previous enquirers welcome to inspect the books. It was, in a way, slightly humiliating for Christopher Rodrigues, chief executive of Bradford & Bingley, that he should so invitingly strip away the bank's protection from a hostile takeover bid only for the share price to rise by a barely visible 2.25p to 323.75p. Once a vigorous proselytiser for mutuality, both before and since he took B&B public in December 2000 he has spoken to virtually all the credible would-be bidders or merger partners, from Barclays to Northern Rock, and no friendly deal has emerged. Under the terms of its flotation, B&B was protected from a hostile bid until 2005 but it seems the stock market does not expect anyone to leap all over it now that that inhibition has been removed two years early.

The real oddity is that Mr Rodrigues should have removed his protective layer on such flimsy grounds – a takeover of Holden Meehan, a perfectly respectable independent financial adviser but tiny in comparison to B&B. The official, and barely credible, line is that B&B was not going to let a little thing like demolishing a takeover barrier stand in the way of its strategy of snapping up attractive IFAs.

Much more likely that Mr Rodrigues wanted to let the rest of the banking sector know he was waiting by his phone. However, in the current state of the stock and mortgage markets, potential suitors may find it pays them to wait a while before dialling his number.

m.harrison@independent.co.uk