BlueScope workers steeled for worst as global forces take hold

As China’s economic contagion spreads, reality is biting hard at BlueScope Steel’s works in Port Kembla.

Evan Hunter, Steel treatment operator at BlueScope Steelworks, Port Kembla where 500 jobs are at risk as the company endeavours to cut costs. Pic - Britta Campion

As China’s economic contagion spreads around the world, reality is biting hard at BlueScope Steel’s works in Port Kembla on the NSW south coast.

There, in the face of cheap imports, the choice boils down to a simple equation: 500 jobs have to go now, says the company, to save 5000.

The company says it has to cut costs by at least $200 million; if not, it may have to face an even harsher decision: a shutdown would cost the Port Kembla-Wollongong region an estimated 10,000 jobs and $3.3 billion.

BlueScope Steel chief executive Paul O’Malley told The Australian: “It’s 500 jobs versus 5000 jobs and I think everyone in their right mind would say if there’s some small sacrifice that can save 4500 jobs, then why wouldn’t you do it.

“You can see from the result what has happened to steel prices. We’ve been very clear about what is needed to fix it. There’s pain and contribution at every level of our organisation and with stakeholders. If anyone is claiming it’s all about them, it completely misses the point.”

For Evan Hunter, a steelworker and father of five, the situation is intensely personal — for his family and colleagues and for the NSW south coast community.

“Five hundred jobs in this region is going to have a huge impact socially and economically,” Mr Hunter said.

“One of the things that concerns me most is the psychological and emotional impact on the community and ... the guys that work here and have been working here a long time.

“And maybe it’s the wrong choice of words but it’s like being institutionalised, you’re very limited (in how) you can take your skills outside. I think it’s going to be devastating.”

BlueScope’s latest round of cost-cutting follows the sacking of 1000 workers after one of the company’s two blast furnaces closed three years ago.

The company has been working hard to forge a pathway through the gloom, or at least keep key people informed. Mr O’Malley said in the past few weeks he had met Tony Abbott, Joe Hockey, Industry Minister Ian Macfarlane and Bill Shorten.

Yesterday, the company’s plight was laid bare. A spokeswoman for Mr Macfarlane said he would hold a roundtable in the ­Illawarra to discuss BlueScope’s future as well as a longer-term economic development strategy for the region. Arthur Rorris — the secretary of the South Coast Labour Council, the peak union body in the region — said Mr Macfarlane should honour an earlier promise to sit down with BlueScope, unions and all stakeholders to nut out a solution.

A study conducted by researchers at the University of Wollongong and commissioned by the Australian Workers Union found that a shutdown of the plant would cost about 10,000 direct and indirect jobs and would result in a $3.3bn loss to gross regional product. If the knock-on job losses were to occur, the study suggests there would be a doubling of the unemployment rate, which is already high at 8.2 per cent. Workers on the margins — including older employees and youth — would be hit the hardest.

Opposition industry spokesman Kim Carr said there was no doubt the manufacturing sector was under acute competitive pressure. It was being exacerbated by the combination of overcapacity in other countries as well as dumping practices. “The Labor Party is committed to ensure that we work with the whole industry, the whole steel ­industry — including companies of all different sizes — and with the unions to develop a policy ­response that sustains jobs and ­capacity in Australia,” Senator Carr said.

AWU national secretary Scott McDine said it was “absolutely critical” the country retained a strong steel industry, warning that the impact of failure would devastate both workers and the communities they supported. He supports an overhaul of procurement practices to ensure that infrastructure projects were made with Australian steel.

Port Kembla branch secretary Wayne Phillips said the union had arranged a “mass meeting for next week of our members”, which the company had agreed to. He hoped BlueScope would commit to a mediation process over its future plans for the steelworks, saying the numbers didn’t add up. Workers were willing to forgo bonuses to save their jobs, he said.

“If we’re going to save this company, it’s up to the workers on the shop floor,” Mr Phillips said. “They talk about flexibility, well, our members are extremely flexible. We get a quarterly lump sum bonus for meeting production targets. Well we’ll give up our bonus if they give up theirs.”

Mr Hunter, an operator in the steel treatment plant, had been involved in some of the negotiations with management about the ­future of the plant. He had not ­“really been happy” with the consultation process to date. “I get the impression it’s sort of like our way or the highway,” Mr Hunter said.

Mr Rorris said the government needed to come to the table.

“They are not just the corner store; they are a multinational company, our region depends on them and depends on this industry,” the labour council secretary said.

Additional Reporting: Joe Kelly, Matt Chambers