Corus, the steel group owned by Indian firm Tata, warned today it will halt work at one of its largest steel plants in the UK, putting 2,000 jobs at risk.
The company said this morning that it had begun a 90-day consultation with employees about mothballing the Teesside Cast Products plant in Redcar. It admitted that the move would lead to a "very significant number of redundancies".
The losses are thought to be in addition to the 2,500 cuts Tata was already planning across its UK operations.
Corus blamed a consortium led by Italian firm Marcegaglia, which it said had agreed to buy a majority stake in the plant but had now "unilaterally and unreasonably" initiated moves to terminate the contract. This consortium have backtracked on a commitment to buy most of the plant's steel output until 2014, and without this "Offtake Framework Agreement" the plant is unviable, Corus said.
The company's chief executive Kirby Adams said he was "extremely disappointed that the consortium members have seen fit to take this irresponsible action."
"Their unilateral termination of a legally binding 10-year contract could bring to an end a fine heritage of steelmaking at Teesside," Adams warned.
Business secretary Peter Mandelson urged Corus to take all available steps to keep the plant open.
"It is essential that Corus does everything it can legally, and with the Government's assistance, to reinstate the Offtake Framework Agreement. It is unacceptable that such a development should threaten jobs on such a scale, with such a potentially devastating impact on the area," he said today.
"The Government stands ready to do what it can to support the company. We are not prepared to reconcile ourselves to inevitable closure of this plant," Mandelson added.
Michael Leahy, leader of the steelworkers' union Community, called the news "appalling".
"We cannot believe that the consortium is taking such irresponsible action that will have a devastating effect on our members and the whole community in Teesside. The consortium has made this disgraceful move, knowingly jeopardising the livelihoods of thousands of workers who are the innocent victims of this."
Guardian News - 08.05.09
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