Bluescope Steel says it will keep its Port Kembla steelworks open, following what it called ‘game-changing cost-out’ commitments by employees, unions and the NSW Government.
“We applaud the contribution by our employees, site management and the combined unions in helping to secure $60 million per annum in labour cost savings. This was an essential step in creating a more flexible and productive steelworks,” said BlueScope Chairman Graham Kraehe in a statement.
Earlier this month, BlueScope workers backed a deal to cut 500 jobs and freeze wages for three years in order to keep the steelworks open.
In addition, the NSW government agreed to defer $60m of Bluescope’s payroll tax payments over the next three years. The arrangement means the company will pay the full deferment amount over 10 years from 2020.
BlueScope Managing Director and CEO Paul O’Malley said more than $100 million in raw materials, operational and services costs would be eliminated.
“We have made progress more quickly than expected on the cost reductions within our control and may in fact outperform in this area – a necessary requirement given steel prices continue to fall,” he said.
The Australian Manufacturing Workers' Union (AMWU) welcomed the news, which will save as many as as 5,000 jobs in the Illawarra.
"Workers are now keen to get on with the job of improving the productivity of the operation and delivering a world-class product," AMWU NSW Secretary, Tim Ayres said in a statement.