Steel industry sheds jobs

With 360,000 workers employed in the steel industry across Europe and countless dependent jobs in other sectors downstream, European leaders are clearly worried for the future of steel in Europe as it falters in the face of the economic slump and changes in worldwide demand. Commissioner for Industry and Entrepreneurship Antonio Tajani stated earlier this year ‘Without steel, there is no Europe.’ In June, the Commission issued an action plan for the steel sector outlining steps the Commission will take to support demand for EU-produced steel, to cut costs for the industry, including those arising from EU regulation, to address skills needs and to promote innovation.

ArcelorMittal downsizes 

A recent EIRO update reports on the latest restructuring plans at ArcelorMittal, the world’s largest steelmaker, in the Walloon region of Belgium. In January, the company announced that it would permanently close 7 of its 12 manufacturing lines in Liège, involving the layoff 1,300 workers. The update highlights the ripple effects of such a downscaling for the region. The union for the Walloon self-employed, UCM, estimated that 6,300 indirect jobs would be threatened if the plan went ahead. A survey by the union among 2,700 local companies found that nearly half expect turnover to decrease over the coming three years. A similar percentage did not plan to hire any new staff, even on a temporary basis, in the near future.

In July, the company proposed a new plan reducing to some extent the proposed closures in Liège. However, this is just one in a series of measures by ArcelorMittal to reduce output and cut jobs across Europe since the economic crisis hit. In 2012 alone, voluntary redundancy and early retirement programmes saw the loss of 1,200 jobs in Galaţi, Romania, and 1,000 jobs across Poland, while the company permanently closed two idle blast furnaces with the loss of over 600 jobs in Florange, France, in the face of strong government opposition. This year, it prolonged the temporary closure of its plant in Madrid, which relocated 290 employees to other plants in Spain, and closed the doors of its works in Schifflange, Luxembourg, indefinitely.

Widespread impact

Steel prices have fallen as a result of the slowdown in construction, while prices for iron ore, the source material, have risen because of high demand from China. Steel manufacturers across Europe are reducing production and shedding jobs. In May this year, German steel multinational ThyssenKrupp announced a plan to cut 3,000 of its 15,000 administrative positions worldwide over the next three years, including 1,500 jobs in Essen, Germany. In July, it initiated the closure of its plant in Valencia, Spain, with the loss of 165 jobs. In November 2012, Indian multinational Tata Steel announced plans to cut 886 jobs across the UK.  The Russian steelmaker Evraz Steel laid off 200 workers in 2012 at its plant in the North Moravia region of the Czech Republic and announced a temporary shutdown of operations in early July 2013.

Addressing such patterns of employment loss will not be easy. The Commission will take stock of progress under the action plan after 12 months and Commissioner Tajani has undertaken to adapt the support efforts as needed.