There will be no job losses among the 700-strong British Steel workforce despite production being halted at the firm’s Skinningrove plant after a slump in orders due to the coronavirus pandemic.
The recently-rescued firm announced on Friday that it was “pausing” operations at the East Cleveland Special Profiles site, initially for three weeks.
Staff will be furloughed.
Tees Valley mayor Ben Houchen said: “The announcement that British Steel is suspending production for three weeks will come as no surprise given the unprecedented national emergency caused by the global coronavirus pandemic, and its impact on businesses both large and small.
“I have spoken to British Steel and I have been reassured that there will be no job losses at all as a result of this. It is expected that all staff will be furloughed. The site at Lackenby is not affected by this and the company’s facility in Darlington will remain open.
“British Steel’s client book remains strong, but a slowdown in business as a result of the outbreak is the reason behind the pause as many of their clients have enough stock in place to last them for three months.
“This is obviously a changing landscape, but at present British Steel plans to reopen as normal once the three weeks are up.
“Since May last year a huge number of people, including the trade unions, have worked tirelessly to secure the long-term future of British Steel, and today’s announcement should not distract from this huge achievement. The firm remains committed to our region and the hundreds of Teesside workers.
“I am in constant dialogue with British Steel and will update everyone when I have more news. My absolute priority remains Teesside workers and I will do everything I can to make sure they and their families get the support they need during the unprecedented challenge we face as a region and as a nation.”
Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, added: “This is a sensible package of measures by British Steel as they negotiate a very uncertain economic period.
“I’m delighted there will be no redundancies. These are the actions of a responsible employer and the unions have also engaged very constructively.
The Special Profiles site will be maintained at a high readiness to resume production at short notice, as and when stockpiles of finished stock are run down.”
British Steel chief Ron Deelan said: “Due to a fall in demand, we’ve paused production and operations at our Special Profiles business in Skinningrove, initially for three weeks, with immediate effect.
“These are temporary measures in the face of difficult market conditions, and we’ll provide all the support our employees deserve and require.”
The Special Profiles facility produces steel products for industries such as rail and construction.
Operations are not affected at British Steel’s Lackenby beam mill, near Redcar.
British Steel was rescued in a takeover by Chinese firm Jingye earlier this year after collapsing under the previous ownership of venture capital firm Greybull.