London: Europe’s second biggest steelmaker, Corus, is to close a plant in northeast England with the loss of 1,700 jobs after failing to secure a long-term partner for the site’s output.
Corus, owned by India’s Tata Steel, said on Friday it was mothballing the Redcar blast furnace, Lackenby steelmaking and the South Bank Coke Ovens, belonging to Teesside Cast Products (TCP), at the end of January.
The firm said it will keep open some Redcar operations, thus meaning around 600 more jobs will be retained than originally envisaged in May, when it said it may have to suspend operations after a consortium terminated a contract to buy almost 80% of the plant’s production for ten years.
Corus has already cut around 4,500 jobs in Britain this year, after shutting plants to offset the decline in global steel demand.
“We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community,” Corus chief executive Kirby Adams said.
The latest job cuts equate to 2% of Corus’ total workforce of 80,000 people.
The unemployment rate in Britain is currently running at 7.8% and the threat of a further rise in the number of people out of work is hampering recovery across many sectors.
Britain’s biggest union Unite called on the government to rescue the plant on what it called a “dark day” for British manufacturing.
“The government must now act to save Teesside as decisively as it acted to save the banks last year,” Unite’s joint general secretary, Derek Simpson said.
The government said it would do all it could to help workers hit by the closure and to find an alternative use for the plant.
“I share the bitter disappointment felt by everyone who is affected by this news,” business secretary Peter Mandelson told BBC television.
“We have working with Corus all year to try and find a long-term solution that would save jobs and capacity at this plant.”
Trade union Community said the Corus decision was “premature” and would have disastrous consequences for Teesside and the manufacturing base of the north east.
“Tata Corus are making a premature decision to close TCP despite having orders on the book to the end of the year. There is still time to save TCP as a going concern,” Community General Secretary Michael Leahy said.