Employees at steelmaker BlueScope’s Western Port facility have started the working year to news of major job cuts.
About 110 staff at BlueScope’s mill at Hastings, southeast of Melbourne, will lose their jobs in the coming months, along with about 60 contractors, the company said on Monday.
Production at the mill is being reduced from mid-March to provide significant cost savings, BlueScope said in a statement.
“Whilst domestic coated steel demand has not materially declined, this is part of our strategy to continually find better ways to do business and remain a cost effective producer,” BlueScope Australia and New Zealand chief executive Mark Vassella said.
“We will now enter a consultation phase with employees and with union representatives to best manage the transition.”
Australian Workers Union (AWU) Victorian secretary Cesar Melhem said it was a terrible start to the year.
“A lot of workers came back to work this morning,” Mr Melhem told ABC TV on Monday.
“I was hoping that 2013 would be better than 2012 (and we could) put these things behind us, but it’s a bad start.”
Mr Melhem said he did not expect many workers to put their hands up for voluntary redundancies.
However, he remained optimistic about the prospects of workers being rehired in the future.
“I’m hopeful that when the market picks up again that some of these workers getting their jobs back,” Mr Melhem said.
Victorian Premier Ted Baillieu said his government would work with BlueScope and the federal government to ensure all workers’ entitlements were preserved.
Mr Baillieu said the high Australian dollar, strong competition within the industry and the volatile prices of steel and iron ore would continue to put pressure on the sector.
He said the job cuts would not change the government’s plans to assign a second Melbourne container port at Hastings.
“Hastings is the natural second port, it has long been declared and we will continue to pursue that,” he said.
The company says it expects the changes to come at a one-off cost of $17 million but that is expected to be recovered within one year due to the resulting cost savings.
BlueScope has already cut about 1500 jobs after making two consecutive annual losses of $1 billion.