1. Summary:
• BlueScope’s biggest steel factory in Australia----the Port Kembla Steelworks, is in serious economic trouble. The future of BlueScope Steel's Port Kembla plant is "on a knife edge”.
• Weak demand, a global glut of cheap production, increased import competition and a stubbornly high Australian dollar are all incentives contribute to BlueScope’s dilemma. Among them, China’s cheap import is a key factor to bring pressure.
• BlueScope’s top managers are considering layoffs to reduce its operational costs. Once the decision is made, it will cause a loss of about 5000 direct and indirect jobs, as well as one-off costs of up to $760 million. The intention causes heated argument.
• BlueScope Steel is calling for government support and …show more content…
The Company is structured into four businesses: BlueScope Australia & New Zealand, BlueScope Building Products, Global Building Solutions and North Star BlueScope Steel (Paul O’Malley,Charlie Elias, 2015). Among the four main businesses, BlueScope Australia supplies a large percentage of all flat steel products, which is the biggest steel manufacturer of Australia. Port Kembla Steelworks, heart of BlueScope, is also the largest steel production facility in Australia. The steel industry was founded in 19th century. Since then, Port Kembla was one of the most important steel factories in Australia. Not only does BlueScope have great influence on steel supply industry, but also on Australian labour market. BlueScope hires around 5,000 skilled and experienced workers. In Port Kembla blast furnace, there are round 2,000 workers employed by the company (BSL, …show more content…
The main reason comes from China’s import. As a real candidate to replace the steel production, China has doubled steel production in recent years, while the demand for steel in China is not growing as fast as the production (The Economist, 2015). Since supply exceeding demand, Chinese factories are willing to seek overseas markets. Comparing to BlueScope Australia, Chinese production has obvious advantages on price. BlueScope steelworks is unable to compete with a growing oversupply of steel from China without the savings. BlueScope needs to reduce workforce, environmental and tax costs to make its source steel substrate cheaper to gain competitive edge from overseas. Otherwise, the company would have no option but sink into economic
• BlueScope’s biggest steel factory in Australia----the Port Kembla Steelworks, is in serious economic trouble. The future of BlueScope Steel's Port Kembla plant is "on a knife edge”.
• Weak demand, a global glut of cheap production, increased import competition and a stubbornly high Australian dollar are all incentives contribute to BlueScope’s dilemma. Among them, China’s cheap import is a key factor to bring pressure.
• BlueScope’s top managers are considering layoffs to reduce its operational costs. Once the decision is made, it will cause a loss of about 5000 direct and indirect jobs, as well as one-off costs of up to $760 million. The intention causes heated argument.
• BlueScope Steel is calling for government support and …show more content…
The Company is structured into four businesses: BlueScope Australia & New Zealand, BlueScope Building Products, Global Building Solutions and North Star BlueScope Steel (Paul O’Malley,Charlie Elias, 2015). Among the four main businesses, BlueScope Australia supplies a large percentage of all flat steel products, which is the biggest steel manufacturer of Australia. Port Kembla Steelworks, heart of BlueScope, is also the largest steel production facility in Australia. The steel industry was founded in 19th century. Since then, Port Kembla was one of the most important steel factories in Australia. Not only does BlueScope have great influence on steel supply industry, but also on Australian labour market. BlueScope hires around 5,000 skilled and experienced workers. In Port Kembla blast furnace, there are round 2,000 workers employed by the company (BSL, …show more content…
The main reason comes from China’s import. As a real candidate to replace the steel production, China has doubled steel production in recent years, while the demand for steel in China is not growing as fast as the production (The Economist, 2015). Since supply exceeding demand, Chinese factories are willing to seek overseas markets. Comparing to BlueScope Australia, Chinese production has obvious advantages on price. BlueScope steelworks is unable to compete with a growing oversupply of steel from China without the savings. BlueScope needs to reduce workforce, environmental and tax costs to make its source steel substrate cheaper to gain competitive edge from overseas. Otherwise, the company would have no option but sink into economic