More jobs to go in BlueScope cull
THE first day back at work can be tough, but for BlueScope Steel worker Tony Hutt his return from holiday was particularly arduous - his employer announced it would soon cut 170 of about 740 jobs at its plant east of Melbourne.
"The Australian dollar has destroyed our export market," said Mr Hutt, a veteran of 15 years at the steel maker, which said on Monday it would shed staff at its Western Port plant by the end of March.
BlueScope has already cut about 1500 people after making consecutive annual losses of $1 billion, blaming the high dollar and a weak steel market.
In 2011 it closed one of two operational blast furnaces at Port Kembla, leading to the loss of about 800 jobs. That move, and the previous closure of hot strip mill operations at Western Port, has seen BlueScope's steel making capacity drop from 5.2 million tonnes to 2.6 million.
For Mr Hutt, Monday's announcement was double-edged as he has bought shares in the company in various staff offers.
"It's a double whammy for us, because our jobs are in threat and our nest egg has shrunk considerably," he said of the firm's declining share price. Bluescope closed up a cent at $3.71 on Monday, and has risen from a low $1.47 last July. In 2007, BlueScope shares were trading over $12.
BlueScope's chief executive, Mark Vassella, said the job cuts and changes to follow would save around $17 million to be "recovered within one year" by reducing costs.
BlueScope will offer voluntary redundancies, with applications due by the end of January.
Macquarie analyst Liam Farlow said market conditions in Australian residential construction remain weak, forcing the steel manufacturer to continue cutting costs.
"This is more of a reorientation of Australian production," Mr Farlow said. "It's just incremental cost savings by the company, which has been struggling with soft-end markets and a high Australian dollar, so it is continually having to focus on where it can pull costs out."
The Australian Workers Union Victorian secretary, Cesar Melhem, said BlueScope is "top heavy" and should be firing managers first. Faced with the carbon tax it received substantial funding from the Gillard government. "Questions have to be asked about how that money has been used," he said.