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Category: Government and Politics / States and Territories / Steel / Industry

Arrium needs to 'find own solution, not government handout'

Tuesday, 5 Apr 2016 06:58:27

Arrium may have to close its Whyalla steelworks. (ABC News: Nick Harmsen)

No government should have to bailout struggling steelmaker Arrium, a former employee and Whyalla resident says, even though the company has threatened to mothball its steelworks operation.

John Sowerby said the community was once again bracing for a possible closure following yesterday's announcement that Arrium's financial backers had rejected a $1 billion recapitalisation plan put forward by American firm GSO Capital Partners.

GSO approached Arrium with a plan to lend it $922 million over six years, and sought to raise $364 million from Arrium shareholders.

The move would have given the firm a 15 per cent stake in the company and two representatives on its board.

The troubled steelmaker announced after its half-yearly results it may be forced to mothball its Whyalla operations if it cannot turnaround its financial fortunes.

About 10 per cent of the city's working population is employed by Arrium.

Mr Sowerby said the city of Whyalla, which has a population of about 22,000, would be devastated if the steelworks shut.

But he believed Arrium needed to find its own solution.

"I want everybody that can possibly help, to help the workers," Mr Sowerby said.

"But at the same time I don't believe any government should be forced to put their hands in their pocket to pull out a company who has been, to me, poorly managed."

Mr Sowerby said he was seriously worried about the future of his city.

"We've already recently had one or two more small businesses close down, so the impact is far further reaching than just OneSteel (now Arrium) — it's a whole community.

"It will affect the banks staff, the shopping centres. It will affect everything."

Senate inquiry committee visit Whyalla

A federal inquiry into the future of Australia's steel industry will hear evidence in Whyalla today.

The Senate Economics References Committee is investigating the future sustainability of the nation's steel industry and supply chain.

Peter Lamps, from the Australian Workers Union, said it was an ideal time for the committee to visit the region.

"Certainly the AWU in South Australia, along with a number of other organisations and unions will be making a submission to highlight the importance of ensuring that there is ongoing steel production in this city, so the timing couldn't be better," Mr Lamps said.

"We would like to now see some interaction with the Federal Government with the State Government to really solidify some degree of clarity about ongoing steel production in this town."

The committee is due to report its findings by June 30.

AustraliaPlus


 

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