Saturday, May 9, 2009

Corus Group, the world’s fifth largest steel producer, announced on Friday that it may be forced to mothball its steelworks in Redcar, England. This move would threaten the jobs of the works’ 1,920 employees.

Corus may be forced to close its Teesside operations as a consortium has refused to honour a 10-year contract with Corus’ Teesside Cast Products, which accounted for 78% of the plant’s operations. Corus’ chief executive, Kirby Adams, said he was “extremely disappointed that the consortium members have seen fit to take this irresponsible action.”

Lord Mandelson, Secretary of State for Business, Enterprise and Regulatory Reform, said “it is essential that Corus does everything it can legally, and with the government’s assistance, to reinstate the agreement”. Gordon Brown, the British Prime Minister, shared this view saying, “We are doing everything in our power to ensure that the contract is upheld.” Mandelson also said “we are not prepared to reconcile ourselves to the inevitable closure of this plant”.

The leader of Redcar & Cleveland Borough Council, Councillor George Dunning, said “Today is like being hit by a mini earthquake compared to what’s happened in the past.”

Martin Callanan and Stephen Hughes, Tory, and Labour MEPs for North East England, supported the idea that the government should subsidise wages in the plant on a temporary basis. Hughes and Fiona Hall, Lib Dem MEP, suggested that the government should apply to the EU’s Globalisation Adjustment Fund. Hall said “if the worst comes to the worst and jobs are indeed lost, I trust the Government will change its mind and support an application to the European Globalisation Fund in order to fund skills training for those who have lost their jobs.”

This move could “bring to an end a fine heritage of steelmaking at Teesside”, according to Adams. Steelworks in Teesside, which previously belonged to British Steel and Dorman Long, produced steel for famous structures like the Sydney Harbour Bridge.

Corus had said it was likely there would be a “very significant number of redundancies” and a 90-day consultation period is due to begin.

Corus’ owner, Tata Steel, are also facing difficulties with another UK operation, automobile company Jaguar Land Rover.