ArcelorMittal lay offs 600 workers as steel world market softens
ArcelorMittal Point Lisas, a subsidiary of the world's leading steel and mining company, has laid off 600 employees with immediate effect, a decision that has been denounced by the Steel Workers Union of Trinidad and Tobago (SWUTT).
The union said that only a few workers would remain on the job at the Point Lisas plant for maintenance purposes, from December 7 to January 15.
In its statement, ArcelorMittal said it had been unable to reach an agreement with SWUTT on a proposal "for workers with accrued vacation days to proceed on paid vacation, while workers who do not have vacation leave to engage in alternative functions on a temporary basis outside of their normal duties".
The steel company said its only other option was to cut workers.
"Aware and conscious of the Christmas season and in the spirit of goodwill and the need of workers to be in a position to take care of their families, ArcelorMittal Point Lisas has undertaken the responsibility to provide the workers with some financial assistance as has been done on occasions in the past," said the steelmaker, adding that it is offering staff the opportunity to "encash a limited amount of accrued vacation entitlement".
ArcelorMittal said the layoffs were linked to the performance of the world steel market and that it told the union last Friday that it was impossible for the company to keep workers on the plant over a protracted period with no work for them to do.
"At a meeting with the union today, the company communicated its decision to lay off employees. The company also informed the union of its preference for employees to proceed on vacation as proposed and left the door open in this regard."
That meeting followed an earlier announcement by ArcelorMittal Point Lisas, a few weeks ago, that due to oversupply of steel in the international market and the drying up of orders for its Direct Reduced Iron and steel products produced at Point Lisas, it had to shut down operations temporarily.
"The global steel industry is experiencing its worst recession in 10 years, comparable to that experienced in the early '90s. Every steel company in the world is facing this difficult reality and ArcelorMittal Point Lisas has had no choice but to react to these changes in the industry," the company said in a statement.
On November 6, ArcelorMittal announced that it was reducing its cash requirements in 2016 by approximately US$1 billion, and that the cuts would be achieved through a number of initiatives, including lower cash interest costs, lower cash taxes and suspension of dividend distributions for financial year 2015.
It said these actions are meant to ensure that the company continues to generate positive free cash flow, reduce its net debt and maintain strong liquidity.