Austrian steelmaker voestalpine to cut productionNovember 21st, 2008 - 9:25 am ICT by IANS
Vienna, Nov 21 (DPA) Austrian steelmaker voestalpine AG announced Thursday it would throttle production by three to five percent and was considering layoffs, in an effort to cut costs in the current global financial and economic crises.The news came on the same day that the company reported strong increases in revenue and profit for its second business quarter, as it was able to pass along higher commodity prices to customers.
Around 2000 leased personnel could be affected by the layoffs, voestalpine Chief Executive Wolfgang Eder said.
“We are trying to keep the core workforce, but we don’t exclude the possibility of having to intervene here and there,” he said.
Of the 42,000 people working for voestalpine worldwide, around 10 percent are leased personnel.
Because of the economic climate and “significantly weaker results” since the end of September, the company’s management board also announced it would postpone its decision about building a steel mill on the Black Sea.
The company’s net profit for the period from July to September increased to 279 million euros ($352 million), from 192 million euros in the same period last year. voestalpine’s business year starts in April.
Operating profit rose to 428 million euros, compared with 302 million euros in the second quarter of 2007.
However, voestalpine’s automotive steel division was affected by the global economic crisis. Results in that division were dampened by production cuts implemented by many car producers in August and September.
Despite the current economic climate, voestalpine intends to achieve results in the current year which match those of 2007-08, when it posted a net profit of 752 million euros.