The steel company has been producing steel in the region for over 150 years.
The company has launched a consultation period with its staff after facing three loss-making years, which could result in the complete closure of its operations.
Challenges Facing Union Electric Steel UK
The site has been grappling with several challenges, including a lack of demand for its UK products, high and unpredictable energy costs, inflation, and increases in national insurance due to the latest Budget, along with the impact of Brexit.
These factors have led to an operating loss of around £5.9m over the past three financial years. The losses are expected to continue into 2025.
Response from Union Electric Steel UK
Will Garrett, managing director at Union Electric Steel UK, 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 UK 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.”
