Menu
Share
Share this story
Close X
 
Switch to Desktop Site

Steel-industry future causes concern

The large Belgian steelmaker Cockerill is reputed to have been the world's first modern multinational company in the 19th century. For years, the skies around its furnaces were red with the glow of intense activity and much of the economy of the southern part of Belgium was oriented toward its output. That and other Belgian steel plants provided the backbone of the country's industrial development.

Today, although the steel industry is still a major element of the Belgian economy, it also has become a major worry for both Belgium and the European Common Market, both in the grips of a general steel slump. Many of Belgium's major steelworks are in deep trouble and dismissing owrkers at an alarming rate.

About these ads

In 1978, according to official statistics, iron and steel accounted for 10 percent of all Belgian manufacturing employment, 5 percent of the value added by industry, and 9.5 percent of Belgium's exports.

But competition from other countries and a general slump in demand has led to painful layoffs and adjustments accompanied by labor unrest in the hardest-hit regions in Wallonia and near the Luxembourg border. Most firms in that part of the country have reported deficits that have had to be covered by government financial and employment aids.

Because the sector is characterized by a large degree of concentration, it has been somewhat easier than might be expected to put into effect a plan for restructuring, which was worked out between the government, industry, and labor in 1977. There was general agreement then that by the end of 1980 the employment levels of 1976 would have to be cut by some 6,000 jobs.

The agreement provided for severance grants to supplement regular unemployment benefits, early retirement planning, a gradual reduction in hours worked, and other measures. A national planning and supervisory committee was set up to define priorities, desirable investments, and the application of the restructuring plan. Official help for firms through direct grants and loans, subject to certain conditions to promote productivity, were confirmed recently by Economics Minister Willy Claes.

Various modernization and conversion programs have been drawn up for the short and medium term, including one by the American management consulting firm, McKinsey & Co.

But the fact remains that Belgium is facing the same type of decline in the steel industry encountered by France, Luxembourg, Great Britain, and West Germany.

Part of the problem in Belgium has stemmed from the fact that while traditional plants were located near the sources of raw materials such as coal, newer facilities have given a priority to location near waterways, and the country's coal mines have been closed down gradually but steadily.

About these ads

The recession in steel has been felt throughout Europe, which has seen 16 percent, or between 120,000 and 125,000 of its steelworkers lose their jobs between 1974 and 1979. Europe has also experienced half of the world decline in production while it accounted for only 22 percent of that output, according to European Common Market statistics.

The Common Market is intimately involved in the Belgian ad over-all European steel dilemna. It has attempted to work out reductions in imports from other producer countries and sought to help financially through investment and unemployment assistance. This has amounted to about $1.5 billion a year in loans for modernization throughout Europe.

But this adjustment process is bound to be increasingly painful if other sectors of the economy are also unable to provide jobs for the thousands of steelworkers laid off during this transition.


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.