Fletcher acts to dispel Pacific Steel job loss fears

The Pacific Steel plant in Otahuhu will close in 2016, potentially displacing 90 workers. Photo / Brett Phibbs

Union says $120m sale means redundancy for 70 workers but company disagrees.

One of New Zealand's biggest unions yesterday voiced redundancy fears for Pacific Steel Group workers - but company owner Fletcher Building said the $120 million sale of assets there did not necessarily spell job losses.

Bill Newson, the national secretary of the Engineering, Printing and Manufacturing Union, said more than 70 Auckland workers were facing redundancy because the company had been sold by Fletcher.

But a Fletcher spokeswoman said most Pacific Steel workers would be unaffected by the sale to BlueScope Steel. "Pacific Steel Group employs about 315 staff across the whole operation and the majority of those employees will be unaffected by the change in ownership.

"The majority of employees working within the Pacific Steel Group rolling mill, wire mill, as support staff or in Fiji will move to New Zealand Steel from the date of deal completion," she said.

"The 90 employees working in the Otahuhu steel plant will retain their roles until the plant closure in 2016, at which point redeployment opportunities will be offered across the Fletcher Building group where possible," the spokeswoman said.

But Newson of the EPMU, which represents 40,000 workers in 11 industries, said the mill's closure would be at "the cost of over 70 jobs. These are high-value skilled jobs and it's a blow to our members and their community to lose them".

Opportunities for workers to retrain in other roles were possible and the EPMU would work with Fletcher to ensure workers who wanted that got it, he said.

"Our focus now is on supporting our members. But these job losses are another indictment of the Government's failure to support jobs and manufacturing in New Zealand.

"We need a serious strategy to grow our industries, not shifting work around and reducing good jobs.

"Employers are telling me that steel is being imported for the Christchurch rebuild. Why are we importing steel and laying off Kiwi steel workers?" Newson asked.

Laid-off union members would get redundancy as part of their collective agreement, he said.

Fletcher yesterday said it had entered a conditional deal to sell Pacific Steel's downstream long-products rolling and marketing operations.

"Most of the employees in Pacific Steel's rolling mill and wire drawing facilities will be offered employment with BlueScope subsidiaries on terms and conditions that are similar to their current arrangements," Fletcher's NZX statement said.

"Staff who are not offered employment will remain employees of Fletcher Building to operate the steel mill at Otahuhu until it is decommissioned, following which they will be given the opportunity to retrain and move to other roles in the Fletcher Group. The transaction does not affect the ownership of Fletcher Building's steel distribution business, Fletcher Easysteel, or its steel reinforcing business, Fletcher Reinforcing.

"Assuming completion by June 30 2014, Fletcher Building expects to record a significant expense item of up to $19 million, reflecting the gain on sale of assets, offset by transaction costs and adjustments to asset carrying values," the statement said.

BlueScope will build a new billet caster at the Glenbrook site south of Auckland, operated by its wholly owned subsidiary New Zealand Steel.

Pacific Steel operations apart from the Otahuhu steel mill would continue under BlueScope's ownership.

Fletcher jobs

•18,830 employees.

•315 Pacific Steel employees.

•90 to keep roles till 2016 closure.

•Redeployment planned for those 90.