Corus warning feeds Llanwern closure fears

Steel group Corus issued a fresh warning over the future of its South Wales plants this week, leading to speculation that Llanwern may be closed.

The company said the strength of sterling and an expected drop in UK car production has put its plants in an increasingly vulnerable position. No decision on closures has been made but more than 3,000 jobs could be lost if the huge Llanwern plant at Newport was to cease production.

Corus will continue to keep the strength of the pound and the condition of its UK customer base under review, a spokesman said.

Ford and Rover are two of Corus’ biggest customers, buying 400,000 tonnes of steel a year from the company’s UK steel plants. While large-scale car production at Longbridge now looks set to continue, Ford is expected to end car production at Dagenham.

Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said his union had spoken to Stephen Byers about the problems facing the UK steel industry.

`We are very concerned that the future of Llanwern and Port Talbot are being speculated over. The fact that Phoenix has bought Rover is a relief not only to Rover workers but to those at Llanwern, but the strength of sterling continues to be a concern,’ he said.

Michael Leahy, general secretary of steel union the ISTC, said all UK steel plants are under threat, but the industry could pull through without closures.

Leahy said that the ISTC had been pushing Chancellor Gordon Brown to look again at the climate change levy and high UK electricity prices, which make British steel much less competitive than that produced in Germany.

Copyright: Centaur Communications Ltd and licensors