Steel needs vision for its long-term future

The Newcastle Herald ran this Opinion Piece today, from the AWU's Paul Howes, after OneSteel announced on Friday it was shutting down this September the former BHP bar mill at Mayfield in Newcastle.

" I am angry about yesterday's announcement by OneSteel of the closure of the Bar Mill in Newcastle, and the Martin Bright plant in Somerton, Melbourne, with the loss of over 300 jobs. It is a body blow to steelworkers, their families and our Steel Communities.

OneSteel boasts of a commitment to its people. This sounds very hollow to their workforce today.

Rather than shutting down production, Australia needs to be investing in skills, new technologies and products to meet world demand.

It seems remarkable to me that with strong growth in our region and record exports of raw materials, OneSteel would be doing this when we have the capacity to add value here in Australia with some of the most efficient and productive steel production in the world.

We can never compete against low cost producers if all we do is slash and burn by cutting our workforce to the bone.

Australia is paying the price for the decade long failure of the previous Government to roll up their sleeves and work with local entrepreneurs to back quality R&D projects.

We are paying for the short-sightedness of the Howard era; facing massive global seismic changes in manufacturing and we have made no plans to secure Australian jobs.

We need to attract more investment from overseas rather than see this investment go to other countries, or local investment move offshore.

The AWU understands that to compete with the rest of the world , we need to be smart. We need the new Federal Government to help develop a plan for a dynamic heavy manufacturing industry.

The AWU supports a strong 'Buy Australian' focus and push to access global supply chains including on local procurement.

The resources and construction boom and infrastructure investment plans of federal and state governments all require massive amounts of manufactured product, in particular from our iron and steel, alumina and aluminum industries.

It will be vital to the on-going success of local manufacturing that much of this investment is sourced from local, in preference to overseas, producers.

And this is where our regions have a vital role to play.

The AWU is a strong supporter of regional Australia. We will begin a campaign this year to secure the jobs of my members in regional Australia, and to expand jobs in the regions to provide opportunities for AWU members' and their families. Good regional outcomes make great national common sense.

The AWU wants the newly elected Rudd Government to build a strategy to help turn our regional centres into the long-term engine-room of Australian growth, environmental protection, population redistribution - as the key to maintaining the Australian dream.

Our big industry superannuation funds must look again at regional Australia for new investment opportunities, and I will advocate for the Rudd Government to provide incentives for these funds to invest locally in our regions.

Because our steel companies and our iron ore companies are so profitable we believe the incentives are there for long term planning for a productive manufacturing economy, built in our regions, providing good jobs into the future.

The Rudd Government, with the support of the Hunter's good local Federal MPs, can help broker this new industry plan for the revival of our regional manufacturing base in the 21st century.

Manufacturing in regional Australia needs to link up to local networks in regional centres comprising local industry, advisory services and market opportunities. Take advantage of local networks to supply locally the needs of our other industries in mining and construction.

A strong commitment by industry and government is required to promoting innovation because innovation is the key driver of productivity and economic growth, particularly for advanced economies such as Australia.

A great example will be design and manufacture of a lightweight, fuel-efficient car - Australian-built by Australian workers - after government funding of five hundred million dollars from the Green Car Innovation Project.

Others such as the aluminum industry seem to me to be much further advanced. They are thinking strategically about how best to invest to take advantage of current and future market opportunities. Already local smelters in Kurri Kurri and Tomago are leading innovation in the world's aluminium industry.

This is the kind of future I see for Australia's great steel industry but it requires leadership and vision, rather than short termism.

OneSteel is a hugely profitable company with revenue nearing $6 billion, and approximately $700 million in profit, but unlike comparable companies it has put very little into plant modernisation and investment in the Hunter.

At the time of the merger shareholders heard a lot about the benefits of linking up with Smorgon Steel. But the benefits of scale and diversification will be quickly lost if OneSteel fails to invest in its own workforce and new products.

The AWU will be doing all it can over the coming weeks and months to ensure that our heavy industries are protected by ensuring that large companies like OneSteel actually invest some of their profits into new skills and technologies. "

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