The hottest wave of steel layoffs has spread to Wu

2022-08-20
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The wave of steel layoffs has spread to Wuhan Iron and Steel Group, a large state-owned enterprise, or 11000 layoffs

photo source; Visual China

the wave of steel layoffs has begun to spread from small and medium-sized private enterprises to super large state-owned enterprises. The interface learned exclusively that Wuhan Iron and Steel Co., Ltd. (hereinafter referred to as Wuhan Iron and Steel Group), a listed A-share company of Wuhan Iron and Steel Group (hereinafter referred to as Wuhan Iron and Steel Group), has issued an implementation plan for reducing staff and increasing efficiency, and plans to lay off 6196 people within three months

the 2014 annual report of Wuhan Iron and Steel Co., Ltd. shows that there are 27760 on-the-job employees, which means that the layoff rate is more than 20%

the layoff will be completed by the end of February 2016. At the same time, Wuhan Iron and Steel Co., Ltd. will carry out the work of staffing and post fixing, carry out the work of all employees competing for posts, and carry out the work of off post resettlement

several anonymous on-the-job employees of WISCO group told the interface that the whole WISCO group may cut 11000 jobs and will reduce the salary of all employees by 20% next year

however, when the interface called Sun Jin, director of the Publicity Office of WISCO group, the other party said that there was no such thing as layoffs and salary reductions in WISCO. As for the salary reduction of 20% for all employees, he explained that WISCO group has implemented the economic contract system for all employees in the past two years, and those who fail to achieve the work goal will be deducted up to 20% of the salary

According to the work internal Journal of WISCO's general strip factory obtained from the interface on December 2, WISCO group proposed to reduce the full caliber labor cost by 20%, but ensure that the employee's income does not decrease. This means that WISCO will reduce labor costs through layoffs rather than salary cuts

for the recent public letter sent by Ma Guoqiang, chairman of WISCO group, to all employees on reducing production and staff, WISCO Group official Xingfu WISCO refuted the rumor on December 7. The chairman's open letter storm, like similar rumors of Rizhao Iron and steel and Baotou Iron and Steel Group, is false information

however, an employee of WISCO who did not want to be named said that the news of a 20% pay cut for all employees next year was notified by the section leaders to the workshop, and their news would not be wrong unless the policy changed. The employee said that now the employees of all units of WISCO group have been informed of the layoffs and salary reductions, and the response has been great. We have been deducted for four consecutive years. Now we have no benefits and don't pay money for the new year

according to the above internal publications, WISCO group requires WISCO's bar material general plant to reduce the salary budget by 20% in 2016, the labor cost of mixed posts by 50% and the labor cost of crown block by 30%

this internal publication lists the recent layoffs of IBM, Siemens, Microsoft, Lenovo holdings and other enterprises, saying that the manufacturing industry situation is particularly severe, and WISCO is no exception. It also writes: the alarm bell for survival has been ringing continuously. If we are still conservative and do not make major changes, we have to wait for production disruption and reorganization, human resources cannot be optimized to the maximum extent, and there is no hope of keeping out of the cold during the freezing period, followed by the loss of our jobs and jobs. Then came the requirement of reducing labor costs

the above internal publications show that the labor cost of WISCO group is too high and the labor efficiency is at a low level in the industry. In January this year, Wuhan Iron and Steel Group Co., Ltd. met the inspection of residual deformation of reinforcement joints by various quality inspection units and construction sites. The full caliber labor cost of the steel group was as high as 7.84 billion yuan. Compared with the world's advanced steel enterprises, the labor productivity of WISCO group is only 1/3 of that of its peers; Compared with domestic advanced private steel enterprises, the labor cost per ton of steel of WISCO group is about three times that of its peers

Li Ying, an analyst at zhuochuang information, said that at present, the loss per ton of steel of strip steel and billet steel mills is more than 200 yuan/ton. From the same period last year to new year's day, although the steel mill's profit was low, within 50 yuan/ton, it was not a loss

at present, the loss of steel mills cannot be blamed on the high price of raw materials. In fact, the decline rate of foreign ore prices this year has exceeded that of strip steel, billet and other finished products. Li Ying believes that the cost share of raw materials is gradually decreasing, and it plays a smaller and smaller role in cost changes. Therefore, it is particularly important for steel mills to grasp financial costs, labor costs and other costs under the current situation of thin industry profits

in fact, WISCO group has already begun to calculate labor costs carefully. At the beginning of September this year, WISCO group said that it would send more than 300 employees to other enterprises or units to take posts in police, security and property management. These dispatched employees are redundant labor in the context of the downturn in the steel industry. WISCO group dispatched them to solve their food problems. Maguoqiang, chairman and Secretary of the Party committee of WISCO group, and others also saw the workers off and cheered them on

unfortunately, the performance data of WISCO group is still deteriorating. According to the above-mentioned internal publications, WISCO lost 5.057 billion yuan in the first ten months of this year, of which the RMB exchange rate in August depreciated by 4.5% in three days, resulting in an exchange loss of 1.547 billion yuan

in the first nine months of this year, WISCO fell into a loss of 1.001 billion yuan, and its profit plummeted by 200% compared with the same period last year. In the first half of this year, WISCO made a profit of 522 million yuan. This means that WISCO lost an average of more than 500million yuan per month in the third quarter. WISCO thus fell into a very serious capital chain tension, and the net cash flow from operating activities in the third quarter was as low as -2.501 billion yuan

compared with domestic peers, the profitability of WISCO is declining. According to the above internal publications, in, the profit per ton of the main steel industry of WISCO ranked 15th, 17th, 13th and 10th among the 62 benchmarking enterprises of the Steel Association. In 2015, the profit per ton of the main steel industry of WISCO was -32 yuan, ranking 25th. Compared with Shiheng special steel, which ranked first, the profit per ton was 202 yuan, while compared with Baosteel Group, it was 198 yuan

as the first super large state-owned iron and steel complex built after the founding of new China, WISCO broke ground in 1955 and was completed and put into operation in September 1958. It is an important state-owned backbone enterprise directly managed by the central government and the state owned assets supervision and Administration Commission of the State Council. The export amount of the factory block of the headquarters is 22.2 million US dollars, which is located in the eastern suburb of Wuhan, Hubei Province and the South Bank of the Yangtze River, covering an area of 21.17 square kilometers. In 1999, WISCO, a subsidiary of WISCO, was listed on the Shanghai Stock Exchange

Since 2005, WISCO group has successively restructured with Hubei steel, Liuzhou Steel and Kunming Steel, and now it has become a large steel enterprise with a production scale of more than 40million tons, ranking fourth in the global steel industry. WISCO group has been on the Fortune Global 500 list for six consecutive years, ranking 310 in 2014 and 500 this year

in 2012, WISCO group's total profit ranked No. 2 in the industry, No. 5 in 2014, and ranked No. 5 from the bottom among 111 central enterprises and No. 89 among 101 large and medium-sized steel enterprises at the end of July this year

in recent years, WISCO group's overseas investment has also been criticized repeatedly. Since 2008, WISCO group has successively arranged eight mines in Brazil, Canada, Africa and other places through equity acquisition and project cooperation, with millions of tons of overseas resource rights. However, the products of these mines, such as reproductive system development problems and liver problems, are not high, mostly around 30%, and the refining cost has increased significantly. The MMX iron ore and bloomlake iron ore invested by WISCO in Brazil and Canada have announced bankruptcy and shutdown

power line surface

as a key project of WISCO group, which focuses on the market of high-end automobile boards and high-end household appliance boards, Fangchenggang iron and steel base has put the first production line into operation on June 28 this year, and the annual production scale of this 2030mm Cold rolling project reaches 2.1 million tons

however, the project not only faces fierce competition from its strong competitor Baosteel Zhanjiang project, whose market positioning is almost identical, but also runs counter to the trend of domestic capacity reduction

at present, China's steel production capacity is 1.1-1.2 billion tons, but the domestic economy is declining, real estate and public infrastructure are shrinking, and the total domestic demand is about 600-700 million tons, nearly doubling the supply over demand. China's iron and steel industry has entered the era of reduction development, and the decline in production and sales is the general trend. In this context, WISCO, like its peers, is bound to face more difficult transformation pain

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