China syndrome threatens NZ Steel jobs

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NZ Steel’s owner BlueScope Steel is threatening redundancies at the Glenbrook Mill near Auckland.

ASX-listed BlueScope is Australia’s largest steelmaker and managing director and chief executive Paul O'Malley says it has been hit hard by a fall in demand from China.

Hundreds of jobs may be affected – not only at Glenbrook but also at the Port Kembla steel works in Australia.

The company has reported a $A136 million profit for the year to June 30 but claims it needs to save $A200 million in its Australian operations and $A50 million in New Zealand

In New Zealand the company also operates the Waikato North Head iron sands mine, which supplies iron sands to the Glenbrook Steelworks and for export, and the Taharoa iron sands mine, which supplies iron sands for export.

In June 2014, New Zealand Steel acquired the rolling and marketing operations of Pacific Steel, the sole producer of long steel products such as rod, bar, reinforcing coil and wire in New Zealand.

These operations are at breakeven levels, prompting the restructuring targets.

NBR Radio’s Owen Poland spoke to Joe Gallagher, EPMU senior organiser for NZ Steel, after today’s announcement.

According to Mr Gallagher, it’s no great surprise, given the recent falls in the global prices commanded by iron ore and steel.

He says the union meets regularly with the company’s senior management team and will continue to do so.

“This is a really large operation with multiple layers of complexity. We have a committed and engaged workforce and we just need to work through what it means.”

Asked if he believes jobs are on the line, Mr Gallagher notes that “there’s restructuring on a constant basis in these kinds of environments” and says he hopes all available options will be looked at, not just those involving the labour force.

“This is a significant employer in the Waikato region, so this has a wider consequential effect to the wider community,” he says. “Not only do they employ over 1000 people, there are also a lot of drop-down industries that rely on the economy that’s driven out of the [Glenbrook] mill, so we need to work through all those elements.”

Regarding an observation by Mr O'Malley that keeping Glenbrook open will require a "more flexible and productive approach to labour," Mr Gallagher says “we understand flexibility, it’s a question of defining what it means to the company.”

As for productivity, he agrees that “if you put in a good productivity system you can achieve some great outcomes, so it’s about exploring with NZ Steel what some of those options could be. We’re up for that challenge but we’ve just got to work through them sensibly.”

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