ThyssenKrupp Says It Will Reduce Workforce
08/13/2012 - ThyssenKrupp Steel USA said on 13 August that it will reduce the current workforce of its Calvert, Ala., plant by 197, of which 143 are hourly positions.
ThyssenKrupp Steel USA said on 13 August that it will reduce the current workforce of its Calvert, Ala., plant by 197, of which 143 are hourly positions.
The reductions will take place in administrative and operational areas and are a result of the increasing costs of raw materials used by the plant and slower than projected growth in carbon steel demand, the company said.
Before the changes, ThyssenKrupp employed about 1,653 people at the Washington County facility.
"While we continue to make steady headway into our target markets, such as automotive and pipe and tube, this has not happened as rapidly as we hoped due to weaker market conditions that have affected us and the wider steel industry," President and CEO Christian Dohr said in a statement. "Despite our best efforts, we are unable to continue operating with full headcount any longer."
Affected employees will be offered severance packages and assistance in finding other jobs with local companies, ThyssenKrupp said.
Company spokesman Amgad Naguib said employees were told in June that work reductions were being evaluated.
He said there are currently no plans for further reductions at the plant, but company officials will continue to evaluate customer demands and efficiencies.
Last week, ThyssenKrupp said it's in discussions with a number of parties regarding a possible sale of, or partnership for, its steel operations in Calvert and Brazil.
The number of interested parties was not disclosed, but ThyssenKrupp CFO Guido Kerkhoff said there were more than 10.
The German steelmaker said in May that it wants to sell its carbon steel operations in Alabama and Brazil. It has already segregated its stainless steel business, renaming it Inoxum, and plans a sale later this year to Finnish company Outokumpu Oyi.
The announcement on worker reductions comes after ThyssenKrupp revealed its third quarter earnings, which fell 79% to €122 million ($150 million). ThyssenKrupp attributed much of its losses in the quarter to its Steel Americas unit.
ThyssenKrupp's Steel Americas had an earnings loss of €778 million ($960 million), a result, company executives said, of the difficult business environment in North America as well as, "considerable costs due to the not yet efficient utilization of the blast furnaces."
Profit for the third quarter plunged to €141 million ($174 million), from €419 million in the same period in 2011. Income and revenue, however, beat the €83.4 million-average of 12 analyst estimates Bloomberg compiled.
Third quarter net sales were €10.71 billion ($13.2 billion), down from €11.51 billion in the same quarter last year.
