US Steel announces massive cuts in Slovakia
On Friday, the American steel corporation US Steel, founded by Dale Carnegie, announced the upcoming mass layoffs in Slovakia. More than 20 percent of the workforce employed by the company at the plant in Kosice will be laid off. This steel company is one of the largest employers in the eurozone and produces mainly steel for the automotive industry.
A month ago, the company decided to suspend the operation of one of the blast furnaces and reduce the work week to four days to save on costs.
The news of the forthcoming layoffs was perceived at the plant as a harsh reality caused by the difficult situation on the steel market.
“As trade unionists, we will take the initiative for the government to start protecting employment as well, to change legislation and introduce instruments to limit energy price increases,” said local unions. “Next week we plan to create an emergency committee with management to discuss how the layoffs will take place,” they added.
The EU coal-fired power industry is facing rising costs of acquiring pollution rights under the Emissions Trading Scheme.
“Steel mills in Europe are facing significant increases in CO 2 costs, which our third-country competitors, who export massively steel to Europe, are not incurring at all,” US Steel said in a statement.
In May, the European Steel Association (EUROFER) called on EU policymakers to take urgent action to help the sector, facing the flow of cheap steel exports redirected to the EU from the US after Donald Trump imposed tariffs on steel and aluminum imports in 2018.
US Steel Kosice is a key supplier to automotive factories in Slovakia, which include Volkswagen, PSA Peugeot Citroen, Kia and Jaguar Land Rover, and has achieved record production in recent years.
As reported, the EU auto industry has begun to show signs of an impending systemic crisis , cutting back on new car production and cutting back on their investment programs. Some manufacturers have begun to close their assembly lines indefinitely due to the lack of stable demand and overstocking of finished goods warehouses.
The unemployment rate in Slovakia was 4.97 percent in June and economic growth is expected to reach 3.5 percent this year and 3.4 percent in 2020.