BLUESCOPE EXPLAINS: Why we had to cut jobs

Updated November 6 2012 - 12:33am, first published August 21 2011 - 11:29pm

BlueScope Australia and New Zealand chief executive Mark Vassella has outlined the company’s rationale behind its restructure in a letter to the Illawarra Mercury.Earlier today BlueScope Steel released details of our results for the year ended 30 June 2011. BlueScope’s export material has been unprofitable since before the Global Financial Crisis and the company has been engaged in a detailed review examining ways to reduce our export exposure, which has historically accounted for approximately 50 per cent of raw steel output.

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  • Full text of BlueScope's announcement to ASXToday we have announced we intend to exit the loss-making export market in a concerted effort to turn around Australian earnings and put our Australian businesses on a sustainable footing for the future.When this plan, to match our production to the domestic market, is fully implemented it will result in the closure of No 6 Blast Furnace in early October, reducing raw steel production to 2.6 million tonnes a year. We will close one coke ovens battery, one steelmaking (BOS) furnace and one of the slab casters. There will be shift pattern changes at the Sinter Plant, Bulk Berth, Raw Materials and No 3 Paint Line, resulting in reductions. There will be significant changes at our Western Port plant in Victoria as well.There will be adjustments to the many BlueScope departments and contracting and supplier groups servicing the operational and maintenance needs of these key operational areas and their supporting infrastructure.We recognise the decisions announced today will have serious flow-on effects in our community. However, they are in direct response to the continuing strength of the Australian dollar, very high prices for our ironmaking raw materials, soft global steel prices and weak demand domestically and are designed to secure the long term future of our local steel industry for all stakeholders. We expect these changes will deliver a material improvement in future earnings and cash flow. These decisions are not an outcome of the Federal Government’s proposed carbon tax announced in July.The company will now begin a consultation process with affected stakeholders, including employees, customers, contractors, suppliers, unions, Government and our local communities. For employees we will examine alternative options including flexible work patterns, expressions of interest for redundancies and job substitutions. There will be programs and job centres established to assist employees who will be affected to transition into the next phase of their careers or lives.BlueScope remains committed to the Australian steel market and we look forward to concentrating on continuing to provide high quality steel solutions for our valued customers.
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