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Why Tees steel still has a bright future

Posted by Jez Davison on July 10, 2009 9:31 AM | 

ANOTHER shaft of Teesside's steelmaking industry melted away recently with the news that Corus is shedding 428 local jobs.


With the steel crisis showing no sign of ending - year-on-year global output dipped 21% in May - nobody can be certain that further redundancies won't follow.

What's certain is that Corus is doing everything it can to preserve an industry whose history goes back as far as chemical giant ICI's, with whom it shares many synergies. Both were huge organisations in their day on whom whole communities depended and were defined by.


The redundancy count might have been a lot worse without Corus' Weathering the Storm cost-cutting initiative, which helped shave £712m off its expenditure bill in the six months to March.


Job losses are an unfortunate consequence of these emergency measures, although that won't comfort the 428 souls who'll be joining the North-east's growing claimant count - up from 3.9% of the workforce to 6.4% in the recession.


But although Teesside steelmaking is on its sick-bed, its decline may not be terminal for two reasons.


Firstly, steel is a basic commodity used in cars and household goods, so the recent fall in demand will surely be reversed as long as people drive vehicles, live in houses and work in offices.


Second, Teesside has proved it can deliver on the international steel-making stage. The next challenge for Corus is to diversify its client base so that it's not reliant on one customer - in this case its overseas consortium - for all of its revenues.


Diversification should be a key aim for other Teesside manufacturers, too.


Adapting traditional skills to emerging markets such as renewable energy could be the difference between survival and failure for some smaller firms.


The Government's green agenda has opened up gold-laden opportunities to develop technologies for carbon capture and storage and the transmission of wave and wind power to the National Grid.


Meanwhile, new-build nuclear power stations will send millions of pounds of work pulsing through the supply chain.


This region cannot afford to get left behind in the green revolution and now is the time to be bidding for work and learning new skills.


Traditional manufacturing will survive on Teesside - but not on its own.

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