BlueScope has done a deal with unions for a three-year wage freeze

(Photo by China Photos/Getty Images)

BlueScope has reached agreement with unions and employees at Port Kembla for a three-year wage freeze and the shedding of 500 jobs, an essential step to achieving a $200 million cost cutting target.

“The constructive engagement by all parties has been outstanding,” says CEO Paul O’Malley

BlueScope has returned to profit, but the company needs to shed costs to meet the challenge of declining demand for steel in China and increased global production.

For the local workers of Wollongong, an industrial city south of Sydney, the agreement was all about keeping jobs and the doors of the steelworks open.

The new three-year enterprise agreement, including a three-year wage freeze, was settled without industrial action.

Unions have also agreed to suspend the Port Kembla wages bonus scheme.

About 300 manufacturing jobs will go under the restructuring reforms mediated by the Fair Work Commission. Another 200 support and service positions will also go.

BlueScope employs around 3500 workers at the Port Kembla business.

O’Malley says the deal is is a major step toward achieving the $200 million cost saving target.

“But we still have a lot of work to do in the coming weeks, as steel prices remain under pressure from the global steel glut,” he says.

“I feel that the positive vote from employees today is a significant step change improvement in our workplace – one that will result in a more cost efficient and flexible steelworks.”

The Australian Workers’ Union says workers accepted real pain and sacrifice to keep the Illawarra steel industry viable.

“Today was a vote as to whether or not the steelworks stays open or whether it shuts,” says Port Kembla Secretary Wayne Phillips.

“It required courage for the result to go the way it did today. It’s a tough moment, no doubt, but I’m at least satisfied that workers have voted to fight another day. We simply can’t roll the dice and allow the steelworks to shut.”

BlueScope shares were up more than 3% to $3.82.

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