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Up to 200 jobs could disappear at New Zealand Steel, Australian owner Bluescope said on Thursday after completing a review of the business.
Bluescope said last month that Auckland’s Glenbrook steelworks could be closed if restructuring and layoffs do not improve the profitability of BlueScope’s business in New Zealand and the Pacific Islands.
NZ Steel employed around 1,400 people at Glenbrook and at Pacific Steel in Otahuhu, south Auckland.
It planned to make 150-200 positions redundant, with the goal of reducing up to A $ 50 million (NZ $ 54 million) in costs.
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* NZ Steel confirms concerns about dumping cheap Chinese steel
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Up to 200 jobs could be allocated to New Zealand Steel.
NZ Steel planned to change its product mix and wanted to cut costs, CEO Gretta Stephens said.
The company would continue to manufacture Colorsteel.
“This proposed pathway to reshape the business for a sustainable future follows the strategic review announced in May. New Zealand Steel has been battling local and international headwinds for several years and has not delivered the required investment returns, ”said Stephens.
Unfavorable public policies on carbon, energy costs and business solutions have compounded financial pressures and the company can no longer continue with its current operating model.
“The review carefully considered all the options available to us, with varying results for our business, including operating costs, product lines, people and revenue.”
It would take several weeks to consult with the staff to cover all their locations and shifts. The company would also inform customers and suppliers.
“We appreciate that this could be a difficult and uncertain time for our employees and the community at large,” he said.
“Our people have demonstrated great resilience in serving customers and safely managing our operations during a period of great distraction caused by the Covid-19 pandemic and the strategic review.
“I am confident that we can deliver the necessary changes and that our team will rise to this challenge to turn our business around and deliver substantial improvements in costs and productivity.”
E tū bargaining specialist Joe Gallagher said he was a bit surprised the company had put a number on the proposed layoffs. He expected the consultation to take six to seven weeks.
The company had been clear about unprofitable products and appeared to be focusing on supplying the domestic market while still producing some products for export, Gallagher said.
The low price of imported steel due to the lack of tariffs was a major problem for NZ Steel.
“We always knew there would be layoffs,” he said.
While the proposal wasn’t nearly as bad as a shutdown, which the company had pointed to last month as a potential outcome eventually, “200 jobs is still 200 jobs in what is a pretty challenging work environment after all – these are jobs from skill “.
Bluescope’s New Zealand and Pacific Islands segment posted an operating loss of A $ 5.8 million over the last financial year, the company said in August.
