Job losses on the way at Corus Group&#39s South Yorkshire plant

Outgoing Corus chairman Sir Brian Moffat confirmed that the group is likely to concentrate its steel making activities into only three main sites.

A review of the group’s UK assets carried out by the board recommended the manufacturing of flat products to be concentrated at Port Talbot in South Wales, long products at Scunthorpe in North Lincolnshire and engineering steels at Rotherham in South Yorkshire.

There will be a consultation on the review's findings, and there could still be a role for the 2,200 employees at the threatened Redcar plant on Teeside, in making steel for the international market rather than for Corus Group orders.

However, the Stocksbridge plant, near Sheffield, will have its steelmaking operations closed and though limited activity will remain at the site, Sir Brian admitted that “approximately 1,150 jobs would be directly affected by these closures and rationalisation measures.”

Erosion
Speaking at the Corus AGM today, Sir Brian said: “The board remains concerned about the erosion of the market value of Corus, the continuing loss making situation and its medium term refinancing. Accordingly the Board is determined to take the necessary action to restore market confidence.”

Corus, formed from the merger of British Steel and the Dutch company Hoogovens in 1999, has been hit by annual losses of over 300m in the last few years, and has reportedly acquired debts of around 1 billion. The losses have been blamed on the decline of UK manufacturing, sterling exchange rates and the undercutting of UK steel prices by imported products.

In 2001, Corus cut over 6,000 jobs and closed more than 3 million tonnes of its iron and steelmaking capacity in the UK. Plans to sell off the aluminium side of its business to the French company Pechiney for about 518m were vetoed by the group's Dutch arm in March (see letsrecycle.com story).

As part of changes to management, a new chief executive, the former Pechiney senior executive vice president Philippe Varin, will take over at Corus on May 1 2003. Sir Brian Moffat's position as chairman of the board will go to the deputy chairman, Jim Leng, from June 1.

Sir Brian concluded: “This is an extremely demanding time for Corus and I would like to place on record my personal appreciation of the tremendous work and support of the Board and employees.”