Monday, 8 June 2009

Potential Corus closure threatens PD Ports jobs

PD Ports has written to all of its 600 workers at Teesport to inform them that up to 20% of them could be made redundant because of volume decreases.

PD Ports’ CEO David Robinson told IFW it may need to make up to 120 redundancies as steel producer Corus has threatened to close Teesside Cast Products because it claims slab buyers failed to meet an agreement to buy a set volume.

If the plant were to close, the port would potentially lose up to 9m tonnes of dry bulk and 2.4m tonnes of finished slab steel.

Robinson said the port had also been hit by a general downturn in traffic caused by the recession. P&O Ferries confirmed to IFW that it was planning to start using its own staff, rather than PD Ports staff, to lash freight on its ships to save costs.

Robinson said: "We’ve entered a consultation period that takes 90 days. No decisions are going to be made until we’ve got certainty over what’s going to happen with the Corus plant and a clear outlook on our business.

"We have activated a voluntary redundancy scheme, which is the most professional way of doing this in the short term.

"When we know the scale of volunteers, we can start to reposition and react to circumstances."

He added: "It will take us a number of weeks and months to know what the outcome of this will be. Until Corus makes a decision, we won’t be doing anything material with the overall workforce."
Robinson said PD Ports had been in contact with the workers’ union, and so far there had been no indication that strike action would take place.

"For the most part they [union members] were expecting us to do something - they were fully aware of the Corus relationship and the Corus connections.

"While it’s an ongoing process and they didn’t appreciate it, they understood why we need to do what we’re going to do."

Although PD Ports is bracing itself for a downturn in bulk volumes linked to Corus, it is also expecting to increase its container traffic by 27% next year.

Robinson said he wasn’t expecting this growth to mitigate all the job losses, but it may mitigate some.

At the end of last month, Tata Steel UK, an indirect subsidiary of Corus’ parent Tata Steel, reached an agreement with banks to suspend covenants until March 2010, and Tata Steel agreed to invest £425m in the firm.

This has led to speculation that the plant could be saved, although Tata Steel UK has to yet to either confirm or deny the rumours.

However, IFW understands that logistics managers at Corus in Teesside have begun asking for quotes from trailer operators for shipments of factory parts to Turkey.

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