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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 UK 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 UK 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 UK
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 UK 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 UK 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 UK, 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 UK 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."