Arrium workers debate proposed pay cut to keep Whyalla steelworks open

ARRIUM workers meet today to decide whether to accept a proposed pay cut, as union members cheer the woman who interrupted the PM’s press conference to debate the merits of free trade.

9/3/16 - Prime Minister Malcolm Turnbull visits Whyalla, talks to woman Raylene Mullins of Victor Harbourat his press conferance - pic Mike Burton

ARRIUM workers are meeting today to decide on whether to accept a pay cut as part of the company’s plan to slash costs to ensure the Whyalla steel mill survives.

Australian Workers’ Union members who are employed in Arrium’s mines and steel mill will meet today to discuss the 10 pay cut proposal.

But the union claims that figure is actually 13 per cent when a recent increase is taken into account.

Arrium has not included a figure for any pay cut to steel mill workers but has flagged reductions in “labour costs” need to be achieved to ensure the plant survives.

The union claims a significant pay cut for steel mill workers will be included in any deal to save the plant.

The company is still searching for $60 million in savings to make the steelworks viable.

“The temporary 10 per cent reduction that we have announced relates to the mining business,” an Arrium spokesman said.

“No details have been provided as yet re the Steelworks – other than we will be looking to reduce our labour cost.”

AWU Whyalla branch organiser Scott Martin said the company’s management have asked staff to take a large pay cut but have refused to guarantee no further jobs will be lost.

“The amount they want to cut (from miners’ pay packets) is actually 13 per cent now because there was a three per cent increase in March,” he said.

“If they came to us earlier and were more open about the situation we could have agreed to freeze that increase while we work out a fair compromise.

“Our workers would be willing to take a pay cut but we want to get guarantees about jobs.

“We don’t want to ask our people to take a 13 per cent pay cut and then have them tapped on the shoulder in June or July and they still get the sack.”

Victor Harbor resident Raylene Mullins debates Prime Minister Malcolm Turnbull on the benefits of free trade during his visit to Whyalla on Wednesday.

Arrium Mining executive general manager Matt Reed said the company was “doing everything possible” to ensure it remained viable in a challenging environment.

“We are working to reduce costs across the whole business and this includes labour, which is a significant component of our total costs,” he said.

Mr Reed said the proposal to freeze wages from the end of February, and then reduce them temporarily 10 per cent “was not made lightly”.

“We have asked all of our employees to take a temporary pay reduction, so we simply cannot afford to contemplate any pay rise,” he said.

“The past 12 to 18 months have been turbulent for our employees and the local community, so I understand this is yet another challenge we unfortunately all have to face.”

Mr Reed said the business was “not currently economic” and unless labour costs were reduced mines could be shut.

“We understand this will be difficult for our employees and their families,” he said.

“However, I’m confident that making this decision will be worthwhile and play a significant role in our turnaround – without it our future will be far less certain as we will face ‘mothballing’ of our operation as a realistic option.”

The first meeting of union members to decide their position on the proposed pay cuts was held at 8am today. Two further meetings will be held today.

Mr Martin said workers were willing to make a deal with the company but it had to provide job security clauses.

“We aren’t being obstinate here,” he said.

“Our members are being reasonable but we want a guarantee about jobs.

“They (Arrium’s management) have got us into this situation, not the workers.”

Mr Martin said union members cheered the woman who interrupted Mr Turnbull’s press conference on a large order from the Whyalla steel mill yesterday to debate his position on free trade.

“There was a big round of applause for Raylene (Mullins) this morning,” he said.

“It was great to see someone standing up to the Prime Minister for our local industries.”

SA leaders on Wednesday praised Mr Turnbull’s announcement to bring forward the rail upgrade from Adelaide to Tarcoola.

Treasurer Tom Koutsantonis said the upgrade would provide a major order for Whyalla-made steel.

“By bringing forward this investment, Arrium will be in a position to bid to supply rail from its Whyalla Steelworks, improving the profitability of the company’s steel division,” he said.

“Although we are awaiting further details from the Prime Minister’s office, (Australian Rail Track Corporation) estimates this upgrade to be about $80 million of rail which can be smelted and provided by Arrium.”