Saarland mills to cut 1,500 jobs

Saarstahl and Dillinger Hütte have developed a detailed action plan for the next few years to enable the two mills in Germany’s Saarland to “…secure our future,” they say in a statement sent to Kallanish.

The title of the announcement, “Dillinger and Saarstahl launch joint future-oriented programme: proactive, carbon-free, efficient,” does not tell the whole story. The plan entails the “…socially responsible reduction of 1,500 jobs and outsourcing of 1,000 jobs in Saarland.”

“The commitment of our employees is high, says Tim Hartmann, ceo of both Dillinger and Saarstahl. “At the same time, our costs are too high when compared with our competitors. We will be adjusting our structures and processes accordingly in the coming months. The goal is double-digit profitability that gives us sufficient scope for growth investments.”

The mills are suffering from the effect of international protectionism, high costs for emission certificates, the current economic downturn and upheavals in core consumer segments such as automotive and mechanical engineering. As a result, Saarstahl has been operating with short-time work schedules since September.

The mills have set themselves a goal of cutting costs by €250 million ($272m) per year. They aim to achieve 60% of this through savings in the cost of materials and external services and 40% in personnel expenses. 14,000 employees worldwide work at Dillinger and Saarstahl under the SHS umbrella, generating total sales of around €4.5 billion per year.

In the wake of the announcement, some 5,500 workers at the mills demonstrated at the start of the week at Saarstahl’s headquarters in Völklingen. A IG Metall union spokesperson told media the European steel industry cannot survive the way things are now. Policymakers must adjust conditions, like the cost of CO2, to provide a future for steel, he said.