Thursday, May 17, 2012

BlueScope and Government equals DANGER!

Govt's response to jobs crisis 'almost negligent'

These are the words by Liberal MP Joanna Gash who is using the latest economic modelling by the University of Wollongong and the Illawarra Regional Information Service.

Basically the report is in two parts as follows:
  1. That BlueScope Steel's August job cuts would cost the region 2567 jobs, $208 million in household income and wipe $743 million off the value of the Illawarra economy.
  2. The closure of the steelworks and shutdown of the Illawarra's steel-manufacturing industry would lead to more than 10,000 job losses and cost $860 million in household income, reducing the value of the regional economy by $2.41 billion. 

BlueScope Steel works - government support minimal!
The following articles and the comments that have been made, highlight the tension in this region as regard to their future! The articles are numerous - here are a few - Govt's Response to job crisis 'almost negligent', What if the unthinkable happens? and The Secret costs of BlueScope job cuts. All these articles are getting print time in the Illawarra - but very little in the MSM - yet Steel Guru, an international website steel industry media group has it listed today HERE! Yet the average person in Australia don't read about it!

One particular comment in the articles above from an Illawarra reader is a follows:

What about the rumour off them losing $1M/Day & paying the employees from the $90M carbon tax 1st installment. Thats already gone.
They are still exporting steel overseas at a huge loss because they have flooded the domestic market & cant sell it. What about the other rumour about them importing slabs & coils for trials.IT AINT NO RUMOUR!!! Just a coincidence that it makes the headlines prior to them making the BIG June annnouncment. STAY TUNED
Posted by rumourmonger, 15/05/2012 11:14:48 AM, on Illawarra Mercury


The big June announcement is what?????

The main point above regarding the report on the economic impact in this region - is the fact that the $30 million Illawarra regional investment fund, jointly funded by Federal and State governments, along with BlueScope Steel, would do little to help the area get back on its feet. Yet BlueScope got an early payment of $90 million? BlueScope still want to dominate the coil steel market in Australia - even if it's imported - but is badged as MADE BY BLUESCOPE and not Made in Australia!

Along with the latest housing figures, ASX sharemarket falls, and general no confidence in the economy - the next 12 months plus are going to be difficult!

4 comments:

  1. Your comments about subsidized exports, would indicate that if all steel was imported, without restriction the cost of Steel in Australia would drop significantly.
    One should consider the benefits to the Australian economy if in fact manufacturers in all areas had access to Steel at internationally competitive prices. Manufacturing of all forms uses steel in 1 way or another, and I believe the advantages of this would soon outweigh the immediate loss of jobs. Close the Mills, asap..I say.!

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  2. Anonymous - a double answer!
    The forcing of importing is a result of costs - not subsidizing! How would access of steel at internationally competitive prices benefit Australian manufacturing? You assume (or believe) the advantages would outweigh the immediate job loss - it's already happened in reverse - solutions are needed not handouts to people or businesses - just economic confidence!

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  3. haha.. ok ask Holden or Ford if they could export more locally produced vehicles, if there was a savings on Raw materials of around 500$ / vehicle.. or at same rate as their USA Sister companies.
    It might not sound like much but as you would know in Car manufacturing, thats a lot of money/ unit. 500$ in cost can equal 4 - 5,000$ in retail..
    Another..Steel cost has a significant budgetary impact in Military, my guess is in 100's of millions of savings per year.. again more funding available for other areas...
    Its only my opinion.. but Economic confidence starts with Building construction, always has always will, when no one is building, confidence is low. Steel cost reductions can improve the Return ratios on industrial investments.. and yes I know, only if there are tenants.

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  4. Sounds like a press release from Mr. Combets office!

    NO! I have always agreed that companies in rollformng should be able to import their own material! Always! But the government & unions restrict this through their own actions - by subsidising the giants of the steel industry (only one (two)- BlueScope & OneSteel) and their command of government ears, money and influence! The example of the auto industry is totally separate - have a look at Thailand and it's booming auto industry? It's the protection the union dominated industries such as BlueScope receive that distorts the equation - not economics! Ask around in the manufacturing industries - they are working their arses off to make money and keep employees - the end result will be a manufacturing black hole - and Australia will import everything! Go to the industrial estates and ask owners how they feel?

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