BlueScope Steel has flagged the possibility of more redundancies and confirmed it will reduce overtime and the number of contract workers and casual employees as it attempts to save $150 million across all operations by June 30.
The Port Kembla-based company, Australia's largest steelmaker, yesterday announced a reported profit of $407 million for the first half of fiscal 2009, largely driven by a weaker Australian dollar.
However, it predicted what would be its first-ever loss in the second half of the financial year if demand for steel continued to decline due to the financial crisis.
Managing director Paul O'Malley would not quantify to what degree cost-saving measures would affect the labour force at Port Kembla, which includes 4686 full-time workers plus contractors.
"We are trying to minimise, as much as possible, job losses," he told the Mercury via a teleconference.
"The target is not one of reducing labour, it's one of reducing costs." BlueScope has already been forced to reduce its reliance on contractors at Port Kembla, which has resulted in about 50 redundancies in the region.
At a half-yearly update for shareholders yesterday Mr O'Malley described how unprecedented financial times had led to a "sporadic" export market.
The company planned to make savings in a range of areas, including labour, but in such a way that production could be "ramped up" when the demand for steel increased.
"BlueScope Steel aims to emerge from the downturn with our position as a low-cost, high-quality steel manufacturer intact," Mr O'Malley said.
Australian Workers' Union Port Kembla branch secretary Andy Gillespie said changes to workers' hours and the way leave was implemented were preferable to Illawarra job losses.
"We are not living in normal times ... and strategies have to be looked at that have not been looked at before," he said. "I think in the short term jobs can be saved, but after that who knows."
BlueScope will push ahead with an upgrade of its Port Kembla sinter plant in April, but may delay the start-up of the No 5 blast furnace after its reline is completed in June "should the market remain flat or worsen".
"Government stimulus packages may translate into some improvement in economic activity later this calendar year, but it remains to be seen how it will affect steel demand," Mr O'Malley said.
He admitted BlueScope also faced challenges after the United States introduced its "buy American" economic stimulus package, and from the introduction of an Australian carbon pollution reduction scheme.
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