Gateshead Steel Plant Faces Uncertainty: 180 Jobs at Risk
The iconic Union Electric Steel UK facility located on Coulthards Lane, Gateshead, is currently embroiled in a difficult decision that threatens the livelihood of 180 employees. The Gateshead steel foundry, which has operated for over 150 years, has launched a consultation process regarding the potential closure of its plant. This decision follows a string of years marked by financial losses and challenges, including high energy costs, declining demand for products in the UK market, and the lasting effects of Brexit.
Financial Struggles and Shrinking Demand
Union Electric Steel UK, part of the historical Davy Roll Company acquired in 1999, manufactures cast rolls, a specialized steel product primarily used in rolling mills. Despite its legacy and commitment to high-quality steel production, the plant has struggled to remain profitable in recent years. 2023 saw the company reporting a significant £6 million operating loss. Furthermore, the ongoing war in Ukraine and the rising inflation have compounded the company’s financial difficulties, leading to continued losses and growing concerns over the facility’s future.
The company’s management has cited high energy costs and a lack of demand for its products as key factors driving the proposed shutdown. National insurance increases, along with economic uncertainty, have added to the pressure. In light of these challenges, the company is considering halting production by the end of 2025.
A Historic Site at Risk
The plant’s history dates back over a century, with the facility being known as the Davy Roll Company for much of its existence. It was later rebranded to Union Electric Steel after its acquisition in 1999. The site occupies a prominent position next to the Gateshead flyover, making it a key part of the region’s industrial heritage.
As one of the last remaining steel producers in the area, the closure of the plant would not only impact the workforce but also the local economy, as steel production is a vital component of the industrial sector in the region. For Gateshead, the loss of such a historic and established employer is seen as a potential blow to the town’s industrial legacy.
Union Electric Steel’s Proposal and Next Steps
Will Garrett, Managing Director of Union Electric Steel UK, emphasized that the closure proposal is still in its early stages. “We recognize the serious impact this could have on our workforce, and we are committed to supporting our staff throughout this consultation process,” Garrett stated. He further added that the company is working with internal and external stakeholders to explore all possible options and solutions before a final decision is made.
The company’s consultation process, expected to run throughout 2025, allows employees, local unions, and community representatives to provide feedback. However, Garrett assured that the plant would continue to operate and fulfill its 2025 order book while the consultation process unfolds. Should the proposal be approved, the closure would likely not take place before December 31, 2025.
Political Response and Community Support
The potential closure of the Gateshead facility has sparked concern among local politicians and unions. Mark Ferguson, the MP for Gateshead Central and Whickham, expressed his strong opposition to the closure. He called on Union Electric Steel to reconsider, stating that the company’s decision could have devastating consequences for the workers and the town of Gateshead. Ferguson has pledged to work closely with local management, trade unions, and Mayor Kim McGuinness to ensure maximum support for the employees affected by the potential closure.
“We must explore every avenue to prevent the closure of this historic site,” Ferguson stated. “This proposal would be a huge blow to both the workforce and British steelmaking, and we need to ensure that every possible option is considered before making a final decision.”
Looking to the Future
As the consultation continues, Union Electric Steel UK remains focused on producing high-quality steel products, as it has done for over 150 years. However, the company’s future remains uncertain as it grapples with the challenges of the modern steel industry, including rising costs, market fluctuations, and shifting demand patterns.
While the community and political leaders hold out hope for a solution, the coming months will be crucial in determining the fate of the Gateshead plant and its dedicated workforce.
