'Unusual' proposals in bid to save steel jobs.

Byline: Peter McCusker

STEEL bosses may ask the Government to pay a proportion of staff wages as one of a number of "unusual" schemes being considered to prevent widespread job losses in the industry.

However proposals which could have seen Corus's 25,000 UK workers - including 4,000 on Teesside - sustain a 10% wage cut were last night rejected.

Unions representing the UK workers met yesterday to discuss management proposals to reduce wage costs as the company looks to axe pounds 350m from its European cost base.

This follows last month's decision to slash production by 30% at all of its UK steelmaking plants including those in Redcar and Hartlepool.

A Corus spokesman said: "Negotiations are currently taking place with the unions to reduce our wage bill with a view to working out how we can get through the current economic downturn.

"All options are on the table at the moment and some of these could be considered as being unusual."

He said one proposal being considered by the company was asking for government support to keep employees on the payroll while they received unemployment benefit, or, for the Government to pay a proportion of staff wages.

He said: "We are a responsible company and we want to be in a position to have the skilled workforce available to take advantage of growth opportunities when they become available."

Last month Corus announced it was going to produce 30% less crude steel than planned during the two quarters to the end of March 2009.

Blast furnaces at Scunthorpe and Port Talbot, as well as one in Holland, have been temporarily shut down.

Job cuts are on the agenda and last month Corus announced 146 redundancies across its Tubes Business Unit, which will see 56 jobs go at Corby, 49 in Hartlepool and a further 41 in the Netherlands. The company, owned by the Tata Group of India, cut 400 posts from its distribution business last month in response to the downturn.

One of the other options proposed by management was for workers to agree to a 10% pay cut.

However following a day of talks the National Steel Consultative Council which represents steelworkers in UCAT, Unite, GMB and the Community Union, these have been rejected - for now. A joint statement by NSCC said: "The company's proposals for a 10% pay cut was part of a range of options which have been so far rejected by the unions.

"Before we reach any agreement on the future of the 25,000 employees, the unions are demanding Corus makes clear its intentions for 2009. Unions have made it clear to the company the current national agreement will remain in place until a viable plan which reflects the challenges of the global economic climate is agreed."

The Journal' revealed yesterday that the UK's largest aluminium smelter at Alcan, Lynemouth, had shut down 30% of its production capacity due to dramatic falls in demand. With sales of new cars and other consumer products falling and China reining back imports global demand for steel and aluminium has plummeted.

Yesterday it appeared that ministers are considering a package of support for the car industry including Nissan where production has been slashed in the run up to Christmas.

CAPTION(S):

MOVE REJECTED Unions representing steel workers at Corus have rejected a suggested 10% wage cut.