S Kalyana Ramanathan / London May 16, 2009
The management of Tata Group-owned European steel conglomerate Corus and the union at the Teesside plant (North East England) today met and decided to set up an “all-party group” to consider all options available to overcome the impending job loss at the plant.
The retrenchment was on account of the cancellation of a long-term order that should have ended in 2014. A member of the union who was at this meeting told Business Standard the talks were very fruitful and the all-party group will meet next week to take the discussion forward. This member said everything is being considered to avoid any job loss in this plant.
Earlier this month, a consortium of four buyers – Marcegaglia of Italy, Dongkuk of South Korea, the Swiss-headquartered Duferco and Alvory of Uruguay – had decided to stop buying steel from the Teesside plant due to a fall in the global price of steel.
The consortium had signed a deal with Corus in 2004 to buy up to 78 per cent of the plant’s output stretching into 2014. The loss of this contract forced Corus to announce earlier that it would be left with little choice but to temporarily shut down this plant.
It is believed that, though the number of direct workers at the beleaguered plant is 1,920, the total may rise to 10,000, taking into account other indirect support institutions attached to this plant.
The only silver lining to the challenge faced by Corus was the instant support it had received from the government, with both UK Prime Minister Gordon Brown and Business Secretary Peter Mandelson voicing their views and support to ensure there would no job loss in the plant.
Mandelson, soon after the news broke, urged the company to consider possible legal action to ensure the consortium honours the contract it had signed in 2004. The consortium apparently had saved several million pounds since 2004, as Corus was supplying its output at cost as agreed between the parties.
The Teesside plant, as of date, is operating even though its future is in doubt.