Up to 180 jobs are in jeopardy at North East manufacturer Union Electric Steel º£½ÇÊÓƵ which is facing closure after producing steel on Tyneside for more than 150 years.
Union Electric Steel º£½ÇÊÓƵ – the º£½ÇÊÓƵ arm of the Ampco-Pittsburgh Corporation based in the US – has announced it has launched a consultation period with its staff following three loss-making years - a move which could result in the complete closure of its Tyneside operations.
The firm, which makes rolling mills that are used to flatten and harden metal, said the Gateshead site has been battling a number of challenges, including lack of demand for its º£½ÇÊÓƵ products, unpredictable and high energy costs, inflation, the increases in national insurance announced in the Budget and ongoing impacts from Brexit.
The challenges have led to losses over the past three financial years, with operating losses reaching £5.9m in most recently published accounts covering 2023, and losses expected to continue in 2025.
Will Garrett, managing director at Union Electric Steel º£½ÇÊÓƵ Limited, said: “This is an incredibly difficult situation, and we fully recognise the impact closure would have on our team here in Gateshead. It is important to understand this is just a proposal at this stage.
"Our priority during this consultation period is to support our staff, provide guidance and fully investigate all other possible options. This proposal is at a very early stage, and depending on the outcome of these investigations, may not go ahead.
"We still have an order book for 2025, and we will continue to operate as usual throughout this consultation period. If the proposal is implemented, we consider it would not take effect before 31 December 2025. Union Electric Steel º£½ÇÊÓƵ Limited remains focused on producing high-quality products, as we have done for over 150 years.
“We are working closely with all internal and external stakeholders throughout this process, and we remain committed to treating our people with fairness and courtesy.â€
Union Electric Steel º£½ÇÊÓƵ Limited, based on Coulthards Lane in Gateshead, was originally known as The Davy Roll Company but the plant was sold in 1999 to Union Electric Steel.
The firm forms part of the Ampco-Pittsburgh Corporation, which has its headquarters in Pennsylvania, US, and has manufacturing facilities across the US and in Sweden, Slovenia, and China with sales offices worldwide.
North East Mayor Kim McGuinness said: “Today’s announcement that Union Electric Steel is likely to close its Gateshead factory is incredibly disappointing, not least when the American owners say it has an order book until the end of the year. I urge them to do the right thing and work to save the jobs of every person who is employed there.
"This is a huge blow and a very worrying time for the 180 employees at the factory many of whom have given their entire careers to UES and before that Davy Roll. They are a skilled and dedicated workforce and we will stand by them and explore every option for the future.
“I will be meeting with the managing director at the factory and unions in the next few days, with the local MP Mark Ferguson, to explore all options to save the jobs of people working at Union Electric Steel. We have already brought together a skills and training task force with our colleagues at Gateshead Council. While the company has said this is a consultation there is no time to be lost. Starting today we shall explore every option to find a new future for Union Electric Steel in the North East and for every person who works there.â€
Mark Ferguson MP for Gateshead Central and Whickham, added: "I know how worrying this decision by Union Electric Steel will be for the workers, their families and our community in Gateshead. I urge the company to think again and to do the right thing by all the staff at this historic site and institution, known fondly as Davy Roll.
“Supporting the workforce is my number one priority in the days ahead. I will be meeting with local management and the trade unions this week with Mayor Kim McGuinness, to ensure maximum support is put in place for employees. I urge the bosses at UES to meet with us as a matter of urgency to explore every possible avenue, to prevent a decision that would be bad for Gateshead and bad for British steelmaking.
“Today’s news serves as another example of why the forthcoming industrial strategy will be so vital, to protect steel and other industries of strategic importance, for º£½ÇÊÓƵ prosperity, security and defence.â€
