Stainless steel giant Outokumpu is to axe another 110 jobs at its melting shop in Sheffield.
The latest cuts come three months after the Finnish company announced it was cutting 50 jobs and three shifts in the same melting shop and just over six months after Outokumpu said it was axing its thin strip business at Meadowhall, with the loss of 230 jobs.
One worker told The Star: "Everyone is feeling a bit betrayed. We feel like we are the scapegoats and everything is geared towards saving jobs in Finland and Sweden.
"It always seems to be Sheffield that's targeted. People are a bit down hearted."
However, Outokumpu denies that Sheffield is being targeted. It says its plants in Finland and Sweden will also be hit and it remains committed to the city where Harry Brearley discovered stainless steel almost 100 years ago.
"Even after these job cuts, we will still have around 450 people left in Sheffield," said a spokesman.
"We will still have a melting shop capable of producing half a million tonnes of stainless steel, although operating at significantly less than that capacity, and a distribution company which has enjoyed some good investment in recent years and is by far and away the largest supplier of stainless in the UK."
At the start of the year the melting shop employed 290 workers and was operating on 18 shifts. Following the latest cuts, the plant will employ around 140 but will still be operating for 15 shifts, although it will only be melting steel for half the week.
During the rest of the week, melting shop workers will be transferred to work on finishing processes or preparing the melting shop.
Outokumpu says the cutbacks will reduce productions from current levels of 350,000 tonnes a year to 200,000 tonnes.
Consultations with workers and unions over the latest round of cuts will start on Monday (April 27) and Outokumpu has said it will "consider all reasonable practicable measures to alleviate the personal hardship caused by this proposal."
News of the cuts came as Outokumpu announced it was looking for further cost savings after suffering a "significant operating loss" on sales which have more than halved, compared with the same period last year.
Outokumpu is suspending the operation of its Chromium mine and ferrochrome plant in Finland, which will affect 300 people, and introducing a rolling programme of lengthy temporarily lay offs, which will affect all 1,500 staff at its Tornio plant.
In Sweden, more than 170 jobs are going at its Degofors plant and discussions are taking place at its Avesta plant about an as yet unspecified number of job cuts.
Figures published this week show Outokumpu lost €249,000 in the first quarter of 2009 on sales down from €1.7 million in the first quarter of 2008 to €679,000.
That compares with a profit of €100,000 in the first quarter of 2008 and a loss of €271,000 in the last quarter of 2008. Group sales in the last quarter of 2008 were €966,000.
Outokumpu says its cost saving programmes are going according to plan and it estimates that total fixed cost savings will be in excess of €100 million in 2009.
The group expects underlying operational losses in the second quarter to be at the same level or slightly lower than in the first quarter.
Chief executive, Juha Rantanen, said: "The stainless markets were exceptionally weak and this is reflected in our loss-making first quarter.
"This market weakness is a result of both lower end-user demand and heavy de-stocking in the long value chain to end consumers. The de-stocking will certainly come to an end at some point.
"Our main focus is now on maximizing cash flow by generating profitable sales, by cutting costs, limiting capital expenditure as well as reducing working capital. It is encouraging that these efforts resulted in strong cash flow generation during the first quarter.
"As the potential for further reductions in working capital is rather limited, increased effort is going into identifying additional cost-saving actions on top of those already being implemented."
Source: Sheffield Telegraph
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