Jobs axed in engineering firm factory closure

An engineering firm is to axe nearly 200 jobs in a factory closure.

Union Electric Steel UK will shut its Gateshead plant in spring next year.

The move comes after Government rescue talks failed following warnings the company was battling “unsustainable” losses triggered by Brexit, lower demand, higher energy costs and inflation.

The firm – known for making cast rolls for the steel and metal industries from a base at the foot of the Gateshead Highway flyover – says “some redundancies” will be made in the intervening period, with the majority of its near 180-strong workforce set to leave next year. 

Bosses say the decision has been made with a “heavy heart”, and have thanked staff “for their hard work, commitment and understanding during this difficult period”.

Will Garrett, Union Electric Steel UK managing director, said: “We recognise the significance of this decision for employees, their families and the local community. 

“Our focus now is on supporting staff, and we would like to continue to work with union representatives and officials at a regional and national level.

“Our intention is to fulfil the order book until the plant ceases to be operational using a phased approach. 

“We thank North East mayor Kim McGuinness, Gateshead Central and Whickham MP Mark Ferguson and industry minister Sarah Jones for their engagement as we sought to find a way forward”.

Sam Lyon, Union Electric Steel president, added: “Our UK operations have faced many challenges for several years.

“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 Government, we have not been able to find a sustainable solution.

“After thorough consideration and exploring all options, closure is the only viable path forward to ensure a strong future for our remaining operations.”

Union Electric Steel has further plants in the US, Slovenia and Sweden, and operates an additional Chinese joint venture.

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