Corus closure could see area flourish

May 10 2009 by Paul Loraine, Sunday Sun

Shutdown could hit 10,000

UP to 10,000 workers could be hit with the closure of the Corus steel plant, experts have warned.

The knock-on effect of mothballing the Teesside steelworks would stretch far and wide, according to analysts.

There has been widespread condemnation of the decision by a consortium of firms to pull out of a 10-year contract to buy steel from the company.

It means the firm has lost 78 per cent of its output for the next five years and leaves it with little alternative but to shut down its Redcar plant, laying off 2000 workers in the process.

And business experts believe the move will have massive effects on the local economy.

Alastair Thomson, dean of the Business School at Teesside University, said: “This is bad news for the region . . . you are taking out one of the key elements of the economic infrastructure in the Tees Valley.

“It will have a significant impact. The Redcar plant has been a major contributor to our local economy, which may not be there going forward.

“There are implications in a number of different directions, not just for the people at the plant itself, but the people involved in supplying Corus with goods and services will be badly affected.”

He also warned there would be big costs to get the plant up and running again after it had been mothballed.

Unions, business leaders and politicians are angry at the decision by the consortium to pull out of the deal.

General secretary of steelworkers’ union Community, Michael Leahy said: “This is appalling news. 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.”

Corus’s new chief executive, Kirby Adams had been in the job just two days when he received a letter from the four firms – Marcegaglia of Italy, Dongkuk Steel of South Korea, Duferco Participations of Switzerland, and Alvory of Argentina – informing him that they were terminating the 10-year contract signed in 2004.

He said: “I am 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.”