Bluescope Steel strikes deal with AWU, trades 365 jobs for Port Kembla plant

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Vapour pours from a steel mill chimney in the industrial town of Port Kembla, about 80 km (50 miles) south of Sydney. Reuters/Tim Wimborne

One of Australia’s biggest steel companies has averted closing the doors to its NSW steel plant after it came to an agreement with the Australian Workers Union to save 4500 jobs.

At a meeting with Australian Workers Union members on Thursday, Bluescope Steel struck a deal that would see 365 jobs lost - 220 shopfloor staff and 145 management - to save its Port Kembla factory.

Bluescope Steel had taken a battering in 2011 when it made a loss of $1billion, which led  800 jobs at the Port Kembla site to be culled. At the time, Bluescope said the high Australian dollar, high raw material prices and a weak steel price was the cause for the loss of profit and subsequent job losses. However four years on, the company is looking for another saviour, this time for 4500 workers.

Bluescope Steel workers met to discuss plan A, which was to put into place a $200 million ‘cost reduction target’. That target breakdown consisted of

$25-28 million from the state government, $110 million from Bluescope Steel and their suppliers and $60 million from  AWU members.

A three year deal was reached with the AWU that included a wage freeze and provisions from the Fair Work Commission, which will see the restructuring of departments including the implementation of new technologies in those departments and reductions in staff numbers.

“We agreed to a wage freeze for three years. That would mean a saving of $9million that would be revisited after 23 July 2018 when we expect a rise to occur. A 5.5 per cent bonus freeze for staff and wages will also be put into place for one year,” Mr Phillips said.

He said the agreement between the AWU and Bluescope was significant as a deal of this scope had not been achieved before.

To put things into perspective, the Australian Financial Review reported in June this year that in the 1980s, four different train stations on the Port Kembla site took some 22,000 employees to the steelworks everyday. Now they’re fighting to keep 4500 jobs at the remaining number 5 blast furnace.

The question that remains is how the company - and the wider steel manufacturing industry - can be sustained to save the 4500 jobs left at the steelworks. According to Mr Phillips, the answer lies with the state and federal government.

“We had a report conducted by BIS Shrapnel that stated the state and federal governments use 1.3 million tonnes of steel. We’re asking for 80-95 percent of that to remain viable into the future,” Mr Phillips said.

Bluescope Steel CEO Paul O’Malley said he believed the outcome from the meeting between Bluescope, the Fair Work Commission and the AWU would have a positive ending.

“The constructive engagement by all parties has been outstanding. I feel that the positive vote from employees today is a significant step change improvement in our workplace - one that will result in a more cost efficient and flexible steelworks.”

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