PORT OF SPAIN –– A day after laid-off workers at ArcelorMittal’s Point Lisas plant won a wage dispute case in the Industrial Court, Port of Spain, the multinational steel company has fired every single employee.
The company closed the plant and sent home its 644 workers, giving a series of reasons why it was no longer economical in the short or long term to carry on doing business in Trinidad.
It cited the increase in cheap steel from China and the decrease in steel prices on the international market.
It also blamed the plans locally to increase gas and electricity prices, port rental, and property tax and business levies as to why the company could not sustain its business.
Yesterday, the Industrial Court ruled that the wages owed to workers, who were laid off in December, must be paid in full by the end of April.
ArcelorMittal was also fined $24,000 for “its illegal industrial action” and its failure to treat with the union. The company has two weeks to pay the fines but has signalled its intent to appeal the judgment in the High Court.
“Despite the company’s considerable efforts to avoid the closure of the iron and steel facility, a combination of local and international challenges have resulted in a decision to close the business, which has been under severe financial distress since the second half of 2015.
Locally, proposed major increases in the local price of gas and electricity at a time of falling commodity prices have rendered production costs uncompetitive. Additionally, proposed increases to port rental fees, announced property taxes and business levies have further contributed to the unsustainability of the business.
As an export-led business, ArcelorMittal Point Lisas has also been severely impacted by the drop in international steel prices and global overcapacity in steel production.
Imports into Central America and the Caribbean –– ArcelorMittal Point Lisas’ core markets for its steel products –– from outside the region, principally China and Turkey, rose by almost a quarter (23 per cent) in 2015, compared with 2014.
As a result of these factors, steel orders were extremely weak in 2015 and the company’s financial position deteriorated significantly, with net losses of US$281m compared with US$44 million in 2014. Furthermore, the company has been recording net losses since 2009.
The plant has been idle since November 23, 2015, when 480 workers were temporarily laid off as the company worked to find an alternative solution to closing the plant. This lay-off announcement was renewed on February3, 2016, when 498 workers were laid off until March 13, 2016.
In recognition of the importance of the company to the economy of Trinidad & Tobago, and to the plant’s 644 employees and many suppliers, ArcelorMittal Point Lisas had been in discussions with the government and other stakeholders to find another solution for the company including a potential sale, or a transfer to the government, but unfortunately these discussions have not had a successful outcome.
As a last resort, ArcelorMittal Point Lisas has therefore recommended a creditors’ voluntary wind-up is undertaken as soon as is legally and operationally practical. Commenting, Jefferson de Paula, a member of the ArcelorMittal Point Lisas’ board of directors, said: “Today is a very difficult day for ArcelorMittal Point Lisas, all its employees and the community in which we operate. Despite working extremely hard over recent months to find a way to keep the iron and steel plant open –– including a proposal to transfer ownership to the Government of Trinidad & Tobago –– maintain employment and return it to profitability, we have unfortunately not been able to reach a solution.
“The business has been battling record proposed rises in gas and electricity prices in Trinidad & Tobago, as well as a steep drop in international steel prices and significant global overcapacity in steel production. This has resulted in the company recording unsustainable losses in 2015, and ArcelorMittal Point Lisas has therefore regrettably taken the decision to liquidate.
“I know this is very bad news for all ArcelorMittal Point Lisas’ employees and their families and we recognise that they will be looking to us for support. As a responsible employer, ArcelorMittal Point Lisas will pay all amounts to employees that they are legally entitled to receive. Furthermore, we are looking into the possibility of whether workers could benefit from the liquidation proceeds that the ArcelorMittal Group is entitled to as a creditor.
“This is not a decision that we have reached easily and we are aware of the impact of this news on the local community. However, ArcelorMittal Point Lisas has been left with no alternative and I hope that following the meetings held with the Union today, employees feel fully informed about the reasons behind the decision.”
Minister of Labour Jennifer Baptiste-Prumus confirmed the dismissals and plant closure.
She said: “They [ArcelorMittal] has filed insolvency which I understand is a judicial process.”
Liaquat Ali, president of the Point Lisas/Couva Chamber of Commerce said he was not aware of the closure of the plant.
However, if the steel company had indeed closed its doors permanently, that decision would have a negative impact not just on workers but on Trinidad and Tobago.
Ali told the Express: “For the workers and their families, I empathize with them and also it is an even greater loss to the country in terms of what they [ArcelorMittal] would have been doing over the past couple of years and now to come and close. I think the Government might have to step in and see what can be negotiated with this company. For the area, this is not a good thing. ArcelorMittal was a giant in the industry.”
He said: “This will reflect in the economy and the downstream in the steel industry. It will be a chain reaction. Centrin depends on ArcelorMittal for their raw materials for the downstream. Definitely that will be a hindrance for Centrin to continue unless they have to source their raw materials from other countries. For the people in Point Lisas and surrounding areas and the country, it is a sad day if that is indeed the case.”