Steel giant Corus has said it will be forced to mothball a factory on Teesside which has 1920 employees after a production contract was pulled.
A 90 day consultation period with the workers at the Teesside Cast Products plant in Redcar will now begin.
Corus said the move was “unavoidable” after a consortium of four international steel slab buyers pulled out of a ten year contract, signed in 2004, to run 78% of the site’s production.
The consortium consisted of Marcegaglia SpA, Dongkuk Steel Mills Co Ltd, Duferco Participations Holding Ltd and Alvory SA.
Corus chief executive Kirby Adams said: “I am extremely disappointed that the consortium members have seen fit to take this irresponsible action,” said Corus chief executive Kirby Adams.
“Their unilateral termination of a legally binding 10-year contract could bring to an end a fine heritage of steelmaking at Teesside. We regret the distress their action will cause TCP’s dedicated employees, who have worked steadfastly in the interests of the consortium.”
Business Secretary Peter Mandelson backed Corus to take legal action.
“It is unacceptable that such a development should threaten jobs on such a scale, with such a potentially devastating impact on the area,” he said. “The government stands ready to do what it can to support the company.
“We are not prepared to reconcile ourselves to inevitable closure of this plant.”
