ArcelorMittal cuts production, jobs in east Europe

Fri Jan 27, 2012 11:18am EST

* 1,000 jobs will be affected in Poland

* European market "challenging"

* 630 employees accept voluntary redundancy in Czech Republic

By Silvia Antonioli

LONDON, Jan 27 (Reuters) - The world's top steelmaker, ArcelorMittal, will cut jobs and production levels at its Polish facilities in order to adapt to lower steel demand in the European market, it said on Friday.

It also said 630 employees at its operations in the Czech Republic have so far accepted a voluntary redundancy scheme.

A deepening sovereign debt crisis in the euro zone and slowing economic growth are forcing a number of steelmakers to shut or reduce steel capacity.

About 1,000 jobs will be affected at ArcelorMittal's Polish branch.

"The steel sector has been affected by the challenging economic environment. Steel demand in Europe is still at approximately only 75 percent of the pre-crisis levels; thus, ArcelorMittal Poland has introduced a strategy of adapting capacity utilization to demand levels," a spokesman said in an e-mailed statement.

"...ArcelorMittal Poland has decided that it is necessary to adjust employment levels to match them with the levels of reduced activity.

"The employment optimization plan is going to take place via a number of measures such as, natural attrition, spin-offs, pre-retirement schemes and separation programmes with severance payments." it said.

CUTS

The Luxemburg-based company said 630 employees have so far accepted voluntary redundancy at ArcelorMittal Ostrava, in the Czech Republic and this number could grow in the next few days.

In December, the steelmaker gave its employees the option to take a voluntary departure.

"This campaign will improve the productivity in ArcelorMittal's plant in Ostrava," the company said in a statement.

"It is a major factor for its survival in the present uncertain and unstable situation in the steel market, as a number of European steelmakers are forced to limit production and capacity due to low demand and surplus stock."

ArcelorMittal in September launched a plan to move production to more cost-effective steel plants as it aimed to boost earnings.

It announced the permanent closure of steel facilities in Liege, Belgium, and has temporarily idled blast furnaces in France, Germany and Poland as well as arc furnaces in Luxembourg and Spain.

In 2010, ArcelorMittal produced 92,629,000 tonnes of steel, of which 37 percent was produced in Western Europe and 11 percent in Central and Eastern Europe. (Reporting by Silvia Antonioli; Editing by Alison Birrane)

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