Up to 6,000 jobs could go in a radical restructuring of Britain's steel industry after the abrupt departure last night of the two joint chief executives at leading producer Corus.
Sir Brian Moffatt, chairman of Europe's second-largest steel group and now acting chief executive, said he would draw up a new strategy by February but admitted: "There will probably have to be plant closures."
He blamed a serious deterioration in Corus's trading performance on the strength of sterling and declining demand from UK manufacturers such as car makers.
The two bosses, John Bryant and Fokko van Duyne, who took command following British Steel's merger with its Dutch rival Hoogovens 12 months ago to create Corus, had shown "lack of progress and leadership", Sir Brian said.
But the two will receive substantial pay-offs. Mr Bryant has a two-year rolling contract which could guarantee him a £1m goodbye.
Corus shares rose 5.25p to 75p,- adding £164m to the value of the company, as the City anticipated drastic action to reverse losses that reached £249m after tax in the first nine months of this year.
Most likely victim would be the Llanwern strip mill near Newport, south Wales, where a blast furnace was recently mothballed and £35m needs to be spent on relining a second furnace.
Some 3,000 jobs could go there but plants such as Lackenby on Teesside are also vulnerable, which could bring the redundancy total to 6,000. These would come on top of existing cuts involving 4,500 staff, although Sir Brian refused to say what scale of redundancies was likely.
Jeremy Fletcher, steel analyst with Credit Suisse First Boston, said: "The scale of the restructuring is going to be very large. This [the management changes] signals the board is determined to get this sorted."
The steel union ISTC said Corus employees were "shocked and alarmed" by the day's announcements, which came as the company was seeing growth in demand and a fall in the strength of the pound.
Michael Leahy, ISTC general secretary, called for an early meeting with management and government action over "this alarming threat to the nation's manufacturing base".
Sir Brian admitted the currency situation had eased in recent days but said there was too much uncertainty surrounding its future direction while the trading scene "was not as strong as it was."
Corus has been exporting 50% of its UK steel products, compared to 30% ten years ago.
