Finnish steel company Outokumpu has said that to be profitable it will have to ax far more jobs in Europe than originally planned. The firm also announced the early closure of a smelting works in Bochum, Germany.
On Tuesday, just about one year after Outokumpu's takeover of ThyssenKrupp's Inoxum high-grade steel division, the Finnish giant announced that it would need to cut another 1,000 jobs in addition to the 2,500 previously publicized.
According to Outokumpu, the company will have to shed capacities both in Germany and Finland, including its smelting works in Bochum, which it plans to closed in the course of next year rather than in 2016 as earlier announcements had suggested.
Regional union leader Knut Giesler said the early closure of the Bochum plant would be unacceptable. "What Outokumpu is planning is nothing short of an outright provocation," he said. "We will certainly not play along doing nothing."
The Finnish steelmaker defended its plans, arguing that though the measures would be painful, they were required to achieve a financial turnaround in the current market.
"If the measures are fully implemented, we could save some 380 million euros ($514 million) as early as 2015," CEO Mika Seitovirta said in a statement. "On top of that, we would ensure the survival of the stainless steel business in Europe and be able to offer safer jobs to the 10,000 remaining employees there."
Outokumpu has had a hard time digesting the expensive acquisition of ThyssenKrupp's Inoxum division. The Finnish firm's net debt load amounted to 3 billion euros at the end of June, seeing it reeling from overcapacities in the sector and cheaper imports from Asia weighing on the company's profit margins.
hg/mkg (dpa, Reuters)