Mexican steelmaker AHMSA to lay off 12,000
03 Dec 2008
Steelmaker, Altos Hornos de Mexico said yesterday that it will lay off 12,000 contract workers in the course of next year citing global recession has forced it to adopt a "severe" cost cutting plan including delaying or suspending various projects.
The steelmaker is also temporarily shelving its $287 million plan of upgrading its Mexican iron mines, which was supposed to have increased the company's annual production capacity by 40 per cent to 4.6 million tons of liquid steel.
AHMSA said that by delaying the upgradation of the mine would culminate in around 8,500 jobs being lost at construction firms hired to carry out the work.
The Mexican steel maker said it will also idle a blast furnace at its mill in the northern town of Monclova and would undertake maintenance which would carry on for at least a month, resulting in a temporary cut in the output by 35 per cent.
The company said, of the 18,000 permanent employees it has on its rolls, further job cuts will be made if the economic situation does not improve
With the US under recession and China cutting back on demand, the global steel industry is staring at a slowdown. Rising cost of production have already forced a number of large steel makers like Arcelor Mittal and Baosteel group to announce production cuts.
The world's biggest steel maker, Arcelor Mittal had doubled it production cuts; Flat carbon steel production was cut by 35 per cent in US and 30 per cent in Europe. (See: Steel slowdown: Chronology of production cuts)
The company said that it was forced to cut back production because demand had declined both in the domestic and international market.
AHMSA also will suspend talks on restructuring its $1.8 billion debt due to the crisis in capital markets and would restart negotiations once the global credit eased.
