Workers at Corus Plc, Europe's second-largest steel company, are reported to have voluntarily accepted a 10-per cent pay cut for six months to try and save the Llanwern, Newport factory in south Wales from closure, although a union spokesman has denied it.

According to the Financial Times, three unions representing Corus's 25,000 steelworkers had discussed the idea of voluntarily opting for the pay cut after having earlier agreed to lower overtime and bonuses.

A spokesman for the main steelworkers' union said that the unions were in talks with the management of Corus to discuss ways to cope with the current economic situation but denied that workers had agreed to a voluntary pay cut as reported in the media. As these discussions were ongoing, it would be premature to make any speculations on the outcome, he said.

The spokesman added that the meeting in London today will be attended by over 100 delegates, representing the Corus workforce and will take the discussion forward and nothing was finalized regarding the pay cut although it was raised.

Last month Corus had announced 400 job cuts to align its production with a demand slowdown in Europe, caused by the global economic downturn, in its distribution and building systems division in its units at Shotton, Wolverhampton, South Wales and Leeds. Corus employs 2,400 people at 36 sites in Britain and Ireland. (See: Corus raises production cuts to 30 per cent; axes 400 jobs) 

An agreement signed between the management of Corus and its unions on a "no job cuts" expires this month and reports suggest that the company is asking for more concessions from the unions.

As global demand for steel has fallen over the cliff in due to the economic slowdown where the demand for steel by construction companies and car manufacturers has nose dived, workers at Corus in the UK are determined to save the plant at Llanwern, Newport, which is one of the few remaining steel manufacturing plants in the country.

Europe's second largest steel producer with annual revenues of more than £12 billion and annual crude steel production of about 20 million tones, had approached the UK government last month seeking aid to tide over the present economic slowdown by helping it pay workers 70 per cent of their wages while the company pays the rest, which would temporary idle thousands of Corus workers at home, rather than making job cuts.

This month it also asked the Netherlands government for financial help from its €6-billion ($7.8 billion) economic bailout fund to help cut down on the work hours of nearly 4,600 employees, due to decline in sales. (See: Corus to avail of government funds in Netherlands for 4,600 employees) 

It also announced last month that it scale back production by 30 per cent to the end of next March comes after it announced last month that it would reduce production 1 million tonnes or by 20 per cent between October and December by a million tonnes of crude steel. (See: Tata cuts steel output at Corus)

Workers feel that even if they voluntarily accept a pay cut, Corus may still close down the Llanwern site in Newport, South Wales, which employs more than 1000 people, as the company seeks to cut costs by £350 million in its European operations as announced earlier.

Corus said that it had held talks with the unions regarding plans to cut cost but the talks had not concluded and more meetings would take place in the next fortnight.