大象传媒 NEWS | The Reporters

Steelmaker to cut 2500 in UK

Robert Peston
25 Jan 09, 01:48 PM

Corus is poised to announce job cuts of 3,500 from its global workforce of 42,000.

A majority of these, more than 2000, will come from the British workforce of 24,000 (see below for update, saying that job cuts in the UK will be about 2,500 in total).

The formal announcement could come as soon as tomorrow morning.

If there's good news here, it's that (as the Sunday Times points out today) the Anglo-Dutch steelmaker is not planning to close any of its substantial manufacturing or processing plants.

Its main sites in the UK are at Port Talbot, in South Wales, Scunthorpe and Teesside.

Corus - which was acquired in 2007 by Tata Steel of India - has been hit hard by the recession. Its order book has fallen a third, global demand for steel has dropped 40 per cent from its peak of last year and steel prices have plunged a staggering 50 per cent since last September.

That said, these cost-cutting measures might well have taken place whatever the economic climate.

They are the result of a substantial review of the efficiency of the business by its soon-to-retire chief executive, Philippe Varin, for the business's Indian owner.

I understand that the cuts at Europe's second largest steelmaker have been brought forward as a result of the downturn, but it was clear to Mr Varin that Corus needed to become more efficient in any case.

Corus has started to temporarily reduce its output to cope with a massive decline in demand from the construction, automotive and assorted manufacturing industries.

This means there isn't full-time work for the majority of the UK workforce who are not being made redundant.

The company wants to use this semi-idle period - which it expects to last for six months - to retrain its employees.

It has requested financial help from the British government for a rolling programme of providing new skills to its entire workforce. This would take the form of a state top-up for the wages of employees.

Corus feels it will have to reduce the pay of employees for six months or so, until demand for steel recovers. The company feels it's fair to request support from taxpayers for an increment to staff pay, because the alternative of making more employees redundant would lead to a rise in social security payments.

A wage subsidy along these lines is provided by the government of the Netherlands, where Corus has substantial operations.

Ministers have not yet decided whether to provide a retraining subsidy of this sort.