It’s spring in Port Kembla…

Well maybe not.



Click to enlarge

The stoicism among BlueScope workers set to lose their jobs is turning to anger as word spreads that the company’s executives will pay themselves $3 million in bonuses while sacking 1400 people and making a billion-dollar loss.

The consequences of BlueScope’s decision to halve steel production became clearer around the Illawarra yesterday, with predictions that 100 local companies will be seriously affected.

Workers and unions greeted Monday’s announcement of 1100 job losses at Port Kembla as inevitable, but by yesterday afternoon the mood had changed to outrage as it was revealed chief executive Paul O’Malley would receive a $720,000 bonus on top of his $1.7 million salary.

BlueScope Australia New Zealand boss Mark Vassella will receive a $269,000 bonus on top of his $763,000 salary, while the man he replaced, Noel Cornish, will get $255,000 on top of his $770,000 salary.

For the 800 workers and 300 contractors at Port Kembla who will be out of work, news of the six-figure bonuses was a bitter blow.

Australian Workers Union (AWU) acting branch secretary Wayne Phillips said it made him "sick" and workers were furious.

"I’m over the shock now and I’m getting bloody angry," he said.

"I find that extremely offensive … that these people who are on millions of dollars anyway, can … sack 1000 people, then reward themselves…


What can one say? BTW, as the above images and extract show, the Illawarra Mercury has been doing a pretty good job on the Bluescope story.

What it all means? Well, that depends who you read.

Take The Australia Institute for example:

BlueScope Steel has led the tantrum against the introduction of a carbon price and today it, or more precisely its employees, have fallen victim to an entirely different problem. The rising dollar has been placing obvious pressure on the competitiveness of the Australian steel industry but the company seems to prefer playing politics than proposing a sensible plan for the future.

Despite all of BlueScope’s thundering about the impact of a small carbon price they were largely silent about the real cause of their problems: the mining boom.

Rapidly rising world demand for Australia’s coal and iron ore has driven up our exchange rate as fast as it has driven down BlueScope’s competitive position. Ironically, other countries are so determined to make or buy steel that Australia can no longer afford to make it ourselves. Nobody ever said global markets generate common sense solutions.

The fact is, however, that if BlueScope had spent the past few years making the case for Australia to introduce a comprehensive mining tax and invest the proceeds in a sovereign wealth fund then they might not be in this position today. But instead of making a sincere contribution to the political and policy debate the steel executives chose instead to try and hide their real problems behind the imagined depravations of the carbon price.

The Australia Institute estimated earlier this year that a $20 carbon price would account for only 0.4 per cent of BlueScope’s revenue after their entitlement to 94.5 per cent of their pollution permits for free was factored in. Even with a carbon price of $23, the impact remains 0.4 per cent of their revenue.

The rising dollar, on the other hand, has been placing the company’s operations under serious threat. So why aren’t BlueScope’s management enthusiastic supporters of the mining tax? Why haven’t they been advocating for a sovereign wealth fund to help keep the dollar down? Why haven’t they been more active in building coalitions with other manufacturers, the tourism industry, the agriculture industry, the education industry and all the other sectors of the economy that struggle to compete internationally with an Australian dollar that is above parity with the $US?

The workers of BlueScope are now facing an uncertain future thanks to the determination of BlueScope management to play politics and to shift the blame.

If the carbon price led to thousands of jobs being lost Tony Abbott would be into his hardhat and expressing outrage as quick as you could say ‘photo opportunity’. But since it is the mining boom that is causing this grief he is strangely silent in his criticism of the big mining companies. Indeed, he has promised to roll back any mining tax that the Gillard Government introduces.

A cynic might argue that he doesn’t really care about the manufacturing industry at all.

Then we have variously:

 Our future is mining, not making (Ross Gittins)

… What governments shouldn’t do is increase protection and other assistance to manufacturing industry itself in an attempt to stave off change. It needs to adjust to the reality of a significantly changed world economy.

Efforts to help manufacturing resist change can come only at the expense of all other industries. There are no free lunches in industry assistance.

It would be a good way to fritter away the proceeds from what the governor of the Reserve Bank has called ”potentially the biggest gift the global economy has handed Australia since the gold rush of the 1850s”.

WA mines ‘can’t save the nation’

WA’s resources sector is unlikely to be the saviour of the Australian manufacturing industry and the national economy is in danger of sliding into a shallow recession, Premier Colin Barnett says.

In the wake of steel producer BlueScope’s decision to shed 1000 jobs and warnings that as many as 100,000 Australians could lose their jobs by March, Mr Barnett said securing locally fabricated content on the estimated $260 billion of local mining and petroleum projects was a "never-ending job".

But he accused the Federal Government of taking its eye off the ball, failing to recognise the significant weaknesses in the non-resources parts of the national economy.

Mr Barnett said the strength of the mining and petroleum sectors had concealed domestic economic weakness.

He urged Julia Gillard to shift her attention from "trying to penalise and hold back the mining and resources industry" through the mining tax and sharpen her focus on "those industries that are suffering", including manufacturing, retail, property and tourism…

Calls to buy local as job losses bite

… The manufacturing debate is set to flare tomorrow morning when the steel industry, unions, an action group of 20 Labor MPs, and ministers hold a breakfast seminar in Canberra. Today the automotive industry, including Holden boss Mike Devereux, will hold similar talks with MPs and other groups.

BlueScope shed the workers because of losses incurred by the high dollar and the soaring costs of coking coal and iron ore. These factors are driven by the mining boom and there is anger against the miners for contributing to the demise of the manufacturing sector while doing nothing to help by establishing start-up deals with Chinese suppliers.

Australian steel is used in no more than 10 per cent of mining construction work. The Greens MP Adam Bandt and independent MP Bob Katter called for local content rules for big mining projects but the government said this would be protectionist.

In a submission to be released today, the Australian Industry Group will propose a national procurement strategy to augment existing government strategies and increase the use of locally made products without breaching World Trade Organisation obligations.

”Ai Group member companies increasingly report being locked out of contracts by barriers and distortions,” said the group’s chief executive, Heather Ridout…