Corus taking on labour as steel demand grows

The steelmaker yesterday announced plans to recruit 160 people to

support its manufacturing operations in Rotherham and Stocksbridge near Sheffield.

Corus, a subsidiary of India's Tata Steel, laid off more than 1,000

people from its South Yorkshire plants last year.

Peter Hogg, general manager of the speciality steels division, said: "2009 was the toughest year in the European steel industry for over 60 years. There were times when our feed into the automotive industry was 25 per cent of what it had been.

"We had to make major changes to our business to weather that storm. We refocused the South Yorkshire business on supplying our quality steel to customers in high-technology applications in markets such as aerospace, automotive and energy exploration and generation.

"These are high-end materials and not heavily traded or speculated on; if people don't need them, they don't buy them.

"There are signs that more positive trading conditions are emerging in some of the sectors we supply to and we are now strengthening the business to be in the best position to compete for new orders.

"The 160 new workers will be recruited on an agency basis initially, but will be trained progressively into skilled steelworkers. If business conditions continue to improve I hope we'll be able to employ them directly at some point in the future."

Mr Hogg added: "We are also working closely with our sister plant in Teesside, which was recently mothballed, in order to provide opportunities to transfer for the skilled steelworkers at risk there. It is important that we do what we can to retain as many skilled workers as possible."

He described the upturn as "gentle but sustained" and said the order book recovery was due to increased demand at end-user level and restocking in the supply chain.

Corus, which employs more than 1,500 people in South Yorkshire, has announced it has strengthened its sales force in the aerospace and energy sectors with additional account managers in the speciality steel business.

Earlier this year the company mothballed a major works in Redcar with the loss of at least 1,600 jobs, a decision which prompted widespread anger from politicians, unions and campaigners.

The Archbishop of York, Dr John Sentamu, who visited the plant in December, said: "The Government needs to be supporting the manufacturing sector. We have seen much-needed investment in the banking sector but we also need to see that support for manufacturing."

Business Secretary Lord Mandelson said in February the Government would do "everything it could" to bring the plant out of mothballing and back into production.

Prime Minister Gordon Brown said the Government was "desperately looking" for new investment in Corus and blamed falling global demand for steel and decreasing prices for the decision to mothball the plant.

Corus said it had been unable to secure the long-term future of the Teesside factory, blaming an international consortium for "walking away" from a 10-year contract in April.

Last year the company announced plans to cut almost 900 jobs in Scunthorpe and some 1,500 jobs in South Yorkshire, although Corus later indicated fewer jobs were lost than expected due to an increase in demand.

Improvement in manufacturing

A key manufacturing survey rose to its highest level in over 15 years last month, and banks said they planned to step up corporate lending, in signs that the recovery is gaining strength.

However, the improvement is likely to take longer to filter through to households. The CIPS/Markit PMI purchasing managers' survey reported a small fall in factory employment, and a separate study showing less-generous collective pay deals.

Yesterday's main news in support of recovery was a rise in the headline manufacturing PMI index to 57.2 from 56.5, a bigger jump than economists had forecast and the index's highest level since October 1994, when the economy was also emerging from recession.

With some caveats, economists treat the PMI and its output component as a proxy for growth in factory production, and Capital Economics estimated that it pointed to a quarterly rise in manufacturing output of just under two per cent, almost double the one per cent growth in January data.