Usiminas Plans to Dismiss 60 Percent of Cubatão Plant’s Workforce, Says Union

RIO DE JANEIRO, BRAZIL – Given the deficient demand for steel in a pandemic scenario of the novel coronavirus, Usiminas may dismiss 60 percent of its workforce in Cubatão, São Paulo, says the Metalworkers Union of Santos and Região. With no agreement on a reduction in working hours and wages, 900 employees should be dismissed, reports the organization.

According to Claudinei Rodrigues, the union’s president, the dismissals were announced in a meeting on Monday afternoon, May 18th, between the company and employees’ representatives. The measure is said to have been taken after no agreement was reached to reduce the facility’s working hours and salaries.

According to people close to the company, the Cubatão complex area managers are being called to discuss the cuts.

Usiminas reported in a note that it does not confirm the cuts and that, since the start of the pandemic, “the company has been adopting several measures to adjust to the current scenario, seeking joint solutions to preserve its workforce and the sustainability of its business as far as possible.”

The company plans to enforce the provisional measures decreed by the federal government, “in addition to other additional adjustments in cases where these measures are insufficient to ensure the survival of the units, as is the case of the Cubatão factory.”

Furthermore, Usiminas “reiterates that it sought to negotiate the conditions for necessary dismissals with the union, but the organization refused to discuss it.”

The steel mill announced a collective vacation for all Cubatão’s workforce in early April. However, according to Rodrigues, Usiminas has been negotiating with the union alternatives to offset the dramatic drop in demand, particularly the reduction in the working day with wage cuts.

The Cubatão complex covers 12 million square meters. In 2015, the company announced the shutdown of its primary areas – crude steel production – and left only the rolling mill running, buying sheet metal from third parties. On-site, Usiminas maintains its own port, one of the company’s most valuable assets.

The unit was privatized in the 1990s and is still known by its original name, Cosipa (São Paulo Steel Company). According to the labor union, the complex has already employed close to 19,000 workers and today has some 1,300.

A few years ago, with no prospect of a full upturn in demand in the domestic market, the company decided to close the crude steel production areas, shutting down the blast furnace, assuming its return a few years later.

However, as the equipment is ancient, it would not endure reconnection, forcing the company to invest billions in the construction of a modern blast furnace.

Last month, the company announced the shutdown of blast furnaces 1 and 2 in Ipatinga, Minas Gerais, and the closure of the unit’s melt shop 1.

Source: Exame