ArcelorMittal Galati urges government to take measures to relaunch steel production

The manager said the unit in the eastern city of Galati, a subsidiary of the world's largest steel producer Arcelor Mittal, is not looking for direct help from the government. Instead, the company urges the executive to take indirect measures to increase internal consumption of steel and, therefore, to launch production at Galati.

The first such measure would be to accelerate infrastructure works, which require large steel consumption. Another measure the government could take would be to encourage the banking system to relaunch lending. This could, in turn, stimulate ArcelorMittal clients to resume steel orders, NewsIn states.

The steel plant received on April 30 the last requests for voluntary leaves from employees who wished to quit their jobs in exchange for compensatory payments. Some 3,000 workers of the total 13,600 working in the plant in December 2008 filed for voluntary leaves and around 1,800 of these requests were already approved. In case of voluntary leaves, employees receive between 10,000 and 25,000 lei depending on the length of service, plus 6 to 24 monthly compensatory salaries.

Employees at the steel plant in Galati are currently on forced vacation, by rotation. When the vacation period is over at the middle of May, the employees will again be sent home in technical unemployment, again by rotation, for the second quarter of the year. They will receive 85 percent of the base salaries plus a bonus for length of work.

The technical unemployment is a direct consequence of the steep decrease in demand. The management predicts a maximum production of 1.5 million tones of steel for 2009. As to the 2010-2012 interval, estimates indicate an annual 3 million tones production, a massive reduction when considering the 4.4 million tones of liquid steel that were produced in 2007.

Since the economic crisis set in last autumn, the steel demand dropped, dragging behind it the halt of activity in the steel-producing plants. The ArcelorMittal Galati management diminished production gradually, temporarily closed units, did away with subcontractors and reduced the number of employees. It also opened a voluntary leave plan at the end of last year, through which it hopes to reduce the staff by 3,600 people by 2012. In addition, an activity restructuring program will be implemented addressing all sectors and aiming to reduce costs, losses and work-related accidents and to increase productivity.

ArcelorMittal is the largest steel producer in the world, employing 330,000 people in over 60 countries. In Romania, it controls the chemical plants in Hunedoara and Galati, the pipe producing units in Iasi and Roman, the harbor operator Romportmet Galati and the local arm of the construction company ArcelorMittal Construction.

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