Reduced order books lead to lay-offs at Metso and Outokumpu

As many as 2,600 jobs at risk

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Engineering and technology concern Metso and steel producer Outokumpu are set to carry out extensive personnel lay-offs.
      The economic crisis stemming from the malaise in the financial market has had a negative effect on both companies’ order books.
      At its Tornio steel mill Outokumpu is to launch co-determination talks concerning potential temporary lay-offs of around 1,500 employees.
      “Our order portfolio at the Tornio facility is insufficient. The volume of orders is currently materially below the factory’s production capacity”, says Juha Rantanen, President and CEO of the Outokumpu Group.
     
In Rantanen’s view the main reason for the fall in orders is the gloomy world economic outlook. As an example Rantanen mentions the construction industry, in which a significant slowing down has taken place both in Finland and abroad. Furthermore, the market price of nickel, the main raw material of stainless steel, has fallen considerably.
      In the spring a ton of nickel cost USD 25,000. Now the corresponding price is just over 10,000 dollars. The price drop has caused some Outokumpu customers to postpone their orders.
      “Also, stainless steel is used in domestic appliances, the demand for which has decreased with the decline in construction. Furthermore, as the clients have limited their investments as a whole, this includes their purchasing of stainless steel as well”, Rantanen explains.
     
The co-determination negotiations that Metso launched in September and October have already been concluded.
      In the Järvenpää, Hollola, and Jyväskylä units, the lay-offs concern 1,100 employees.
      Director Pauli Koutonen from Metso Paper estimates that in the first instance, at the beginning of December, about a third of the announced number of employees will be facing some time away from work.
      “Demand for new paper and paperboard machines has died down. As I understand, this is due to the uncertainty of the world’s economic situation. The customers think ever more carefully before making new investments”, Koutonen says.
     
“Though the situation seems bleak, it may change quickly, if the company manages to secure a new machine order”, Koutonen adds.
      “Fortunately we are still conducting negotiations over new orders, so the situation is not in a total standstill.”
      Then again, if new orders are not secured by the spring, the situation may also take a turn for the worse.
      “This would mean months of lay-offs for some of our staff.”
     
At the Metso Paper Järvenpää factory, the personnel were not in a state of shock over the lay-off news.
      “Our staff is aware of the current situation in the field. From the entire factory’s point of view it does look somewhat grim, but I still believe that things will improve. We have seen several setbacks in the past, but we have always recovered”, says Arto Leskinen, shop steward for senior office staff at the plant.
      Leskinen believes that the majority of the lay-offs will concern office workers.
      Despite the lay-off news, neither Outokumpu nor Metso changed their forecast for the ongoing quarter’s result.


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  Outokumpu
  Metso

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