Polestar has revealed the problems facing its Greaves gravure site in Scarborough after the local press claimed its 350 staff had been told it could shut in April.

Operations director Chris Pavlosky said talk of closure was "premature", but said Greaves was a loss-making business that couldnt be sustained in its current form.

Greaves decommissioned a press in September, but cost reductions have not been enough to bring performance to required levels.

A source close to Polestar said losing the 5.25m-run monthly Sky magazine (PrintWeek, 24 August) was "the final straw", but added that the real damage had been done when it lost Safeway magazine and the 4.4m-run twice-yearly AA magazine and prior to that the Telegraph work.

Greaves was described as being put in an "invidious" position when problems at Varnicoat forced it to take on some News International work, causing disruption to its clients.

Polestar has yet to reveal the future of Chromoworks, despite the Nottingham plants GPMU chapel voting 69 to 51 against accepting the firms proposals.

A source said the group "wouldnt want to jeopardise" the Christmas listing sections for TV magazines printed at Chromoworks.

GPMU deputy general secretary Tony Burke was disappointed with the result. "It has been uppermost in the minds of the national union to secure a future for the company," he said.

PrintWeek also received an anonymous letter, purporting to be from a Chromoworks employee, that claimed the chapel was a "small bunch of clowns who speak for themselves", and was "trying to close a plant".

And PrintWeek has also received a copy of a letter sent by the chapel committee to Polestar chief executive Barry Hibbert on 3 October complaining about the behaviour of Chromoworks managing director Peter Clark, which it said "borders on the bizarre". Hibberts reply said Clark had "behaved impeccably in what have been occasionally tense negotiations".

Story by Gordon Carson