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The Corus axe finally falls

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Weeks of speculation over job losses within the steel industry ended this morning with the announcement by Corus that over 6,000 jobs will be lost over the next two years.

Corus, formed in 1999 by a merger between British Steel and Dutch firm, Hoogovens, cut 4,500 jobs last year, but indicated that further cuts would occur when its two chief executives resigned just before Christmas.

The Welsh steel industry has been hardest hit, with a total of 1,340 jobs being cut as steel making ends at Lanwern near Newport, and the total closure of the plant at Ebbw Vale with the loss of 780 jobs. A further 319 jobs will go from the company’s site at Shotton in North Wales, whilst the plant at Bryngwyn in South Wales will close with the loss of 127 jobs. 234 jobs will be axed at Teeside in the North of England.

Corus said that the redundancies will be completed over the next two years leaving a workforce of 22,000.

The announcement was made this morning by Corus chairman, Sir Brian Moffat, after briefing the Government about the scale of the redundancies. The company said that there had been a lack of increase in demand for steel in the UK, which had been made “dramatically worse” by the weakness of the Euro. The comparative strength of the pound, difficult trading conditions and the loss of traditional markets had contributed to the decline in demand.

The redundancies had been expected for several weeks, and Sir Brian has been under intense pressure from trade union leaders, Members of Parliament and government ministers to scale back the number of redundancies and to increase consultation processes with both unions and the government.

John Monks, General Secretary of the TUC said, “This is devastating news for steel workers, their families and their communities. It has been made even worse by the high-handed attitude of Corus management, shown graphically by their out of hand dismissal of the ISTC’s (The Iron and Steel Trades Confederation) buyout proposal for Llanwern. Corus has put its shareholders first, second, third and last. it has treated its tremendous workforce, which has made British Steel world class, very sharply indeed. The strong pound has undoubtedly heightened the problems faced. But this provides no excuse for the way Corus has kept the workforce, the unions and the government in the dark about their plans. Its behaviour can only strengthen the case for information and consultation rights. Even at this late stage Corus should think again and work with unions and government to find a way through the industries current difficulties.”

The job losses have been further condemned by politicians. Council leaders and officials in South Wales condemned the closure of the Ebbw Vale steelworks as “unmitigated economic disaster” and called for “intervention at the highest levels”. Welsh economic development minister, Michael German, said that the announcement was “a hammer blow for Wales”. Welsh-born European Commissioner Neil Kinnock, once an MP for South Wales, said, “when we’ve got a pound that is 25% overvalued, it doesn’t exactly help steel firms”.

For the government, Welsh Secretary Paul Murphy is urging the steel making giant to reconsider its decision. He said, “I think any long-term view of the industry would focus on its fundamental strengths and not, as Corus appeared to have done, on its short-term difficulties. Until today Corus have refused to discuss their plans with the government or the Welsh Assembly. They have been secretive and their behaviour has added to the climate of suspicion surrounding the steel industry. However, it is still not too late for Corus to reconsider. I am sure that together, we can find a path to a better future for steel – if only Corus will engage with that process. My door is open and I am prepared to discuss this matter with Corus at any time”.

Secretary of State for Trade and Industry, Stephen Byers, said, “it is a bitter blow to the workers and communities affected”.

Trade unions are expected to mount a campaign to try to save as many jobs as they can, whilst the government is likely to offer special help to workers being made redundant.

Communities living around the steel making sites in Wales have been devastated by the news, with expressions of ‘betrayal by Corus’ being common.

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