LONDON Aug 4 A restructuring plan by Germany's ThyssenKrupp that involved cutting up to 550 jobs at its Italian stainless steel plant has been put on hold following a week-long strike action, industry sources said on Monday.
The move comes after Italy's economic ministry last week called for a halt to job cuts at the Acciai Speciali Terni (AST) plant pending a Sept. 4 meeting with unions.
The ministry had said in a statement on Friday that ThyssenKrupp had accepted the minister's request to suspend decisions relating to the plant.
Unrest at the plant had ceased with workers calling an end to their strike, the sources said, although there is currently no production at the plant because a pre-arranged summer maintenance programme began on Monday.
AST declined comment.
Tensions at Terni are a blow to Thyssenkrupp, which was forced to take back the loss-making plant from Finland's Outokumpu earlier this year even though its strategy is to get out of the stainless business.
In July, Thyssenkrupp presented a plan to cut about a fifth of the jobs at Terni and 100 million euros ($135 million) in annual costs, adding that failure to meet targets would force it to close one of its 600,000 tonne-a-year stainless furnaces.
The Terni site, about 100 km from Rome, is a big employer in the Umbria region and a big supplier to Italian industry. It has changed hands twice in the past four years and may be put up for sale again in the medium term.
In an effort to protect their jobs, workers last week took strike action against the cuts and blocked the A1 motorway near the plant, an important route between Rome and Terni.
"There is a witch-hunt climate at the moment with all workers trying to figure out whether their job will be cut," a worker at the plant said. "We are on forced holidays this week but I would have preferred to be at work."
Italy is Europe's second-largest steel producer after Germany, though its capacity has been severely reduced since the financial crisis and the government is keen to ensure it does not lose another major manufacturer.
Steel-making and related industries account for roughly 5 percent of gross domestic product in Italy, where the central bank last month cut its estimate for 2014 growth to just 0.2 percent. (Editing by David Holmes)