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Business Times writes that eleven years ago, steelmaker ArcelorMittal SA (AMSA) was one of the 10 largest companies listed on the JSE.
But two recessions since then and feeble economic growth in between have put the company's back against the wall. Add to that cheap imports from other steel-producing nations and sharp increases in energy costs, and it becomes clear why more than R100bn of shareholder value has been destroyed and the company has a market capitalisation of only about R3bn today. AMSA now wants to rejig the business in a big way and indicated the following last week: "A large-scale restructuring is contemplated, and it is anticipated that in excess of 2,000 positions may be affected." Though the number of jobs cut will only be determined in consultations with trade unions and employees, the possible job cuts represent nearly a quarter of the workforce. Production costs are not the only problem. Over the past two decades China has expanded its steel production substantially and has been able to export cheaply to other markets, including SA. AMSA spearheaded a campaign to have steel tariffs slapped on imports and, though it made some headway, it has still found the going tough. Trade union Solidarity now warns that the possible retrenchments at AMSA may be the first of many. "All stakeholders should urgently intervene; otherwise, more and more companies will have to face retrenchments," said Solidarity's deputy general secretary, Marius Croucamp.
- Read the full original of TJ Strydom’s report in the above regard at BusinessLive (paywall access only)
Get other news reports at the SA Labour News home page