Latest news on Corus

5th December 2009

Type: News

Categories: Love Middlesbrough News

The Love Middlesbrough Campaign generally promotes positive stories about Middlesbrough. We felt it is important to share the latest information and actions undertaken by Mayor Ray Mallon and Middlesbrough Council with partners. Our hearts go out to all those families affected.

Corus news

An international consortium’s breaking of a binding contract has led Corus to partially implement the proposal announced in May 2009 of mothballing some of the facilities belonging to the Teesside Cast Products (TCP) business in northeast England.

TCP’s Redcar Blast Furnace, Lackenby steelmaking and the South Bank Coke Ovens will be mothballed at the end of January 2010. Corus intends to keep open a number of operations, including the Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity.

The partial mothballing will result in the loss of about 1,700 jobs.

The decision to partially mothball TCP follows strenuous efforts by Corus over the past eight months to secure a long-term future for the plant after the failure of four international slab buyers to fulfil their obligations under a 10-year contract that they signed with Corus in 2004. This contract committed the consortium to buying about 80% of the plant’s production for ten years.

Since the consortium broke this legally-binding agreement, from which it made an estimated $800m profit, Corus has been diverting internal orders to TCP. The company has also been securing external orders on an ad hoc basis in a bid to keep the plant open while an alternative future for the plant was sought. This has cost the company about £130m. Operating a 3 million tonnes per year merchant slab plant is not sustainable without a long-term strategic partner.

Chief executive Kirby Adams said: “We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community. We extend our sincere gratitude to all of them, as well as to the management team and the trade unions on Teesside, who have all worked night and day to try and avoid this outcome.

“This is the last thing we wanted and we feel deeply about what is happening. Sadly, it has become unavoidable, through no fault of our people on Teesside.”

Mayor Ray Mallon urges Government Intervention to save Corus jobs

Mayor Ray Mallon of Middlesbrough has urged the Government to intervene to save the Corus plant on Teesside.

The Mayor, who serves many residents in Middlesbrough who will be directly and indirectly affected by today’s closure announcement, believes the Government has a duty to step in and subsidise the steel industry on Teesside.

He said: “If this Government intervene they will save 1,700 jobs and they will have played a crucial role in allowing Corus to flourish in the future.

“If they fail to take action then the public will hold them to a large extent responsible bearing in mind that they have already intervened to the sum of billions to save the banks as well as a large subsidy to the car manufacturing industry.”

The Mayor said that if action is taken now to save the plants in the short and medium term then they will be in a much stronger position to compete in the global markets in the future and the country as a whole will benefit as a result.

Mayor Ray Mallon said: “One of the main reasons for the economic downturn and subsequent recession is that the manufacturing of goods within this country has declined drastically over the last 20 years.

“The ship-building industry, together with the coal industry and other important manufacturing sectors have disappeared.

“As a result we import more goods then we export abroad and it’s therefore vital that manufacturing industries such as Corus are saved and allowed to progress into the future.

“In countries such as Japan and Germany they subsidise the steel industries in times of recession as they clearly understand that the steel sector is vital to their economies.

“They recognise that by subsidising and assisting their steel industries they become stronger when a recession ends.

“It’s vital that this Government now intervenes and subsidises Corus in the short and medium term as there is no doubt if Corus can survive then they will be stronger in the steel markets across the world and will be able to compete on the global markets.

“It’s a simple economic fact that the steel manufacturers who survive will be stronger in the future after the recession.”

“Steel prices are on the rise which indicates that there will be new buyers for Teesside steel in the future, with it being a particularly high grade.”

The Mayor believes if the plants are mothballed they will be unlikely to ever return to production.

Actions taken by Middlesbrough Council and partners

Corus Response Group: Middlesbrough Council has been working as part of the Corus Response Group, led by One NorthEast, and including Middlesbrough and Redcar & Cleveland Councils, Corus, Chamber of Commerce, Tees Valley Joint Strategy Unit, Tees Valley Regeneration, JobCentre Plus, Learning and Skills Council, Business Link, Trades Unions, and Vera Baird MP. The Task Group has mainly focused on supporting Tees Cast Products to secure its long term future, however, it has also led on work outlined below in preparation for potential closure.

Support to Employees: The Council has been working with other Local Authorities and JobCentre Plus to ensure that support is in place for employees who may be affected by redundancy to find other employment or to pursue training for new careers or self employment, as quickly as possible. Plans are in place for an on-site support centre which will provide a range of advice and guidance services, and the Council will be providing financial support and seconding staff to this.

Supply Chain: Business Link and the Chamber of Commerce have been leading on identifying potential impacts on businesses that supply goods and services to Corus, and supporting affected businesses to make preparations and look for alternative markets.

Short/Medium Term Replacement Employment: There is a pipeline of potential significant investment projects which could come into the Tees Valley to provide new employment. Tees Valley Regeneration has been particularly supporting projects which could provide alternative employment to Corus employees, and/or which could utilise Corus land for alternative uses in the event of TCP closure. These won't be immediate projects, but have the potential to re-provide more jobs than those lost over the medium term, examples include the Sonhoe heavy crude upgrader.

Long Term Strategy: The loss of significant steel manufacturing on Teesside means the loss of a significant long term economic driver for the Tees Valley, and new industries will need to be developed to give the area a stable economic base. The Council has been working with the Task Group and Tees Valley Unlimited to develop a long term economic strategy for the Tees Valley.

Useful Links

Love Middlesbrough: Key Strengths - Love Our Industrial Heritage

Corus

RSS feeds