The impending closure of a historic steel plant in Gateshead, which employs 172 people, has been officially confirmed.
Union Electric Steel has declared that its º£½ÇÊÓƵ operations will come to a halt in Spring 2026. The facility had its potential shutdown announced earlier this year by its American owners. This decision has now been solidified, with the firm citing "a comprehensive analysis of the company's long-term viability in the º£½ÇÊÓƵ market, including the impact of economic pressures and shifts in global demand."
Originally known as Davy Roll, the establishment has a legacy of over 150 years in steel production. However, it has faced hurdles such as soaring energy costs and inflation, leading to a loss close to £6m in 2023 and a reduction in staff numbers.
Efforts by North East mayor Kim McGuinness and Gateshead MP Mark Ferguson to rescue the plant have unfortunately not borne fruit.
Union Electric Steel º£½ÇÊÓƵ Limited's managing director, Will Garrett, said: "We recognise the significance of this decision for our employees, their families and the local community. It is with a heavy heart that we announce the closure of our Gateshead operations after over 180 years of manufacturing.
"I wish to personally thank every one of our dedicated employees for their hard work, commitment and understanding during this difficult period. Our thanks also to mayor Kim McGuinness, Mark Ferguson MP and Sarah Jones, the º£½ÇÊÓƵ Minister for Business for their continued engagement as we sought to find a way forward."
He added: "Our focus now is on supporting our employees, and we would like to continue to work with union representatives and officials at both a regional and national level. Our intention is to fulfil the order book until the plant ceases to be operational using a phased approach.
"While there will be no imminent job losses, some redundancies will be made before the Spring of 2026. We will now return to consultations with union representatives in terms of timing and phasing".
Sam Lyon, president at Union Electric Steel, said: "Our º£½ÇÊÓƵ operations have faced many challenges for several years, including unpredictable and high energy costs compared to our competitors, lack of demand for our product manufactured in the º£½ÇÊÓƵ, and increased imports of rolls and flat rolled steel into Europe from low-cost countries.
"These headwinds have created an unsustainable loss-making position for the past three financial years, with further projected losses for 2025 and into future years. Despite actively engaging with the Department for Business and Trade and exploring the acquisition of the plant by the º£½ÇÊÓƵ Government, unfortunately we have not been able to find a sustainable solution.
"After thorough consideration and exploring all options, we have unfortunately concluded that closure is the only viable path forward to ensure a strong future for our remaining operations."
Kim McGuinness, North East mayor, articulated the community's disappointment: "It is sad news today that Union Electric Steel in Gateshead is to close. We have worked very hard with local unions, the firm's managers and local MP Mark Ferguson to find a way forward that might have saved the plant but that has not been possible.
"Our whole focus now is on finding new jobs and opportunities for the staff who work at Union Electric, including making sure the right training is there for everyone affected."
