Alro Slatina said it would probably cut production by 50%, and as of next year, the workforce will likely shrink by 1,200, the final decision following to be made early next week by the Board.
Vitmeco proposed new production cuts at Alro SA and workforce reduction, in an effort to cope with the sharp decline of aluminum price, which fell over 50% since mid July 2008. The recommendation came as a response to a general review of global operations conducted by Vitmeco.
“In the past few months, the price of aluminum plummeted, in the context of a poor economy that heads towards recession. We are one of the first companies to react to market deterioration by announcing production cuts in China since October. At this point, the price of aluminum slid to a bottom level that forces us to consider production cuts in Romania, in order to stay competitive and to preserve the liquidities of the group and of local units”, said the chairman of Alro SA, Christian Wuest.
Furthermore, the aluminum smelter will seek other cost reduction measures on raw materials, such as alumina, coke, pitch and other materials and services.
The seven trade union leaders of Alro Slatina have signed a joint protest letter called “Stop the carnage at Alro Slatina”, as a response to Vitmeco’s board decision to cut 1,800 jobs and to close down half of the aluminum facilities.
Constantin Popescu, leader of “Aluminist” trade union said the announced layoffs were part of a first stage, and that in spring, the producer would shut down.
Trade unionists claim the board to state the reasons for this decision, in the context of 130 million US dollars profit. They stressed that the board had made this decision to enable the company contract the required amounts for financing investments conducted by Vitmeco in China. In China, Vitmeco is running an investment program of over 1.5 billion dollars which consists in setting up two aluminum firms and a thermal power plant. Vitmeco also holds a coal mine in China and a bauxite mine in Sierra Leone.
Trade unionists say Vitmeco ‘s board had allegedly used loans of over 250 million dollars in the development of production facilities in China. The trade unions leaders will meet on Thursday with unionists on the platform in front of the company at around 15:00 in order to agree upon the protest measures for the coming period.
Alro Slatina reported 292.8 million lei after-tax profit in first nine months, 22% down from a year earlier, as a result of 5% decline of turnover.
Alro Slatina reported an after-tax earning of 376.2 million lei in first three quarters last year.
Source : WallStreet
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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