Amsterdam: Tata Steel unit Corus has applied to the Dutch government to part-fund temporary cuts in the work hours of 4,600 staff, a Dutch trade union said on Tuesday, as the global slowdown eats into production levels.
“This is terrible but the best option under the circumstances,” spokesman Maarten Hoelscher at trade union De Unie said, adding that the market had changed dramatically in recent weeks.
The government-funded work reduction scheme is part of a $7.6 billion package - equivalent to 1% of Dutch GDP - announced last month to boost the flagging Dutch economy.
If Corus’ application is approved, its workers in the Netherlands would be paid 70% of their wage via unemployment benefits, while Corus would pay the other 30%, a second trade union - FNV - told Dutch news agency ANP.
The arrangement would run for six weeks, starting in the first week of January, ANP said.
Corus, which employs 11,300 workers in the Netherlands, said in a statement on Monday it had applied for the work reduction scheme for staff at its Corus Steel plant at Ijmuiden, near Amsterdam. It did not specify the number of workers that could be affected.
The Social Affairs Ministry aims to make a decision on applications for the scheme within one working day, meaning Corus could expect an answer later on Tuesday.
Corus, Europe’s second largest steelmaker, said last month it would extend previously announced production cuts beyond December, having said in October it would reduce third quarter production to 80 percent of normal output.
“Corus expects to produce about 30% less crude steel than planned during the two quarters to the end of March 2009,” it said.
The cuts are part of a wider industry trend, as steel companies battle falling demand, with global leader ArcelorMittal announcing last month a temporary output cut of 30%, up from an initial 15%, as it forecast a weaker final quarter.
De Unie’s Hoelscher said the union had reached an agreement with Corus about supplementary measures and that the work reduction scheme would be evenly spread across the workforce.
To qualify for the scheme, companies in the Netherlands must have reported a 30% decline in sales in the past two months. If approved, the arrangement can be extended up to three times, for a total period of 24 weeks.
The Social Affairs Ministry said 15 applications have been lodged for the work reduction scheme so far. Applications have been lodged by businesses in the metal/electronics sector, car industry and transport sector, the ministry added.