Salzgitter Plans to Cut More Than 1,500 Jobs
Stock Chart for Salzgitter AG (SZG)
Salzgitter AG (SZG), the German steelmaker that last week predicted a loss for 2013 amid waning demand in Europe, plans to cut more than 1,500 jobs as it seeks to save more than 200 million euros ($265 million) a year.
Salzgitter, based in the town of the same name, has drawn up a framework agreement with the works council and the IG Metall labor union that is “due for formal signing in the near future,” it said in a statement. The state of Lower Saxony holds a 26.5 percent stake in the company.
The steelmaker reduced its profit forecast on Aug. 5, the third time in nine months that it lowered its guidance, as competition stemming from underutilization of production capacity in southern Europe pushed selling prices for most rolled steel products below manufacturing cost. That left the company with a first-half loss of 315 million euros.
Salzgitter’s performance in the first six months of 2013 “was largely determined by the structural crisis in the European steel industry,” it said. The company cited asset impairments at the Peiner Traeger unit, weakness of steel products amid a downturn in the construction industry, and a “dramatic lack of orders” at its tubes division.
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