Australia’s BlueScope Steel has let 1,000 employees go as it exits the export business thanks to a 1 billion dollar loss that the company has incurred. In response to the event the boss of the Australian Workers Union, Paul Howes said that Dutch disease was crippling Australia’s economy.
Paul O Malley the Chief Executive officer of BlueScope Steel said that in a macro-economic or global steel situation where you have high raw material prices or costs, a high ‘Aussie’ dollar, low steel prices and low demand in the Australian market relative to history you have a situation that is very difficult to fight against.
Paul Howes was supported by a group of federal Labor MPs as he demanded some action to prevent the mining boom from destroying the manufacturing industry. The weakening of the economy via this process is known as the Dutch disease.
The former BlueScope Steel Workers have been approached by BHP Billiton and Fortescue Metals Group with job offers in the Pilbara region of Western Australia. It may not be quite that simple as a former employee of BlueScope Steel Gregg Davies said that as single man he could pack and move west for another job. However the other guys have families and young kids and it would be very hard for them to move out of the area, especially fly-in fly-out and things like that.
Analyst Michael Pascoe said that Australia was suffering from a shortage of heavy industrial skills. A key reason why more resources engineering was not done in Australia was that they didn't have the capacity to do it. He added that close to 40 companies have already contacted BlueScope Steel with queries for available workers.