Steel mill expected to make job cuts

By NZPA

Wednesday 3rd July 2002

New Zealand's biggest steel producer, BHP NZ Steel, would not reveal today whether job cuts were imminent at its South Auckland plant.

Unions, however, said that they had been consulted yesterday and were expecting an unknown number of job cuts, as the company strove to make savings and lessen the impact of US tariffs on imported steel.

BHP's mill in Glenbrook has about 1300 staff and it currently exports just under $60 million worth of product to the US each year.

In April the company said the tariffs, a stronger dollar, and similar trade barriers elsewhere in the world would take their toll on the company.

Andrew Little, the national secretary of the Engineers' Union which covers about 80 percent of workers on the site, said he would be talking to members over the coming weeks.

"They want to seek a better return on capital on their business. They've been directed by their overseas owners to do that. That combined with the tariff issue from the United States earlier this year has required them to review the business...," he told National Radio.

"That will inevitably mean the reduction of workers on that site... We're now need to sit down with the company and work through the processes that are in place."

Mr Little said BHP NZ Steel hoped to have the reductions completed by Christmas.

National Radio reported that the New Zealand company's parent, BHP Billiton, had reset its financial targets, aiming to reach a return of capital of 15 percent by 2006. It aimed to do that by cutting costs of $500 million across its global empire.

Earlier this year BHP NZ Steels's president Cyril Benjamin said the company's Glenbrook mill south of Auckland would continue exporting to the US at present capacity levels, but it would have to absorb heavy costs.

"We do expect to fill the same tonnes to the US, it's just that it's going to stay at very low prices, and perhaps even be below the prices we've been getting in the last year or so."

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