Tata Group-owned steel maker Corus has been offered by its worker unions to carry out 10 per cent cut in pays for six months in a last ditch effort to save a factory in Wales from closure, says a media report.
"Unions representing steelworkers have offered to take a 10 per cent pay cut across Corus' entire UK workforce of 25,000 in a desperate attempt to save a large factory in south Wales from closure," the Financial Times reported on Thursday.
The move by Corus unions is a part of a growing trend as firms such as Irish stockbroker Davy, Frenchbroker CLSA and UK engineering JCB are seeking innovative ways to cut costs without firing people, at a time of low inflation, the FT said.
The negotiations had been prompted by the acute downturn in the global steel market and the move would have a much wider implications for other British and European workers as companies seek cost cuts.
The three unions representing Corus workers have discussed the option of cutting wages by 10 per cent for six months with the company.
"Representatives would accept a 10 per cent decrease for everybody, from the bottom to the top of the company," FT quoted one of the senior official as saying.
Unions were concerned that the management may press ahead with an alternative solution that could include the closure of Llanwern, Newport, which is one of the last remaining steel factories in the UK.
The steelmaking part of Llanwern was shut in 2001 with 1,300 redundancies but the site still makes steel sheets and employs more than 1,000 people, the report stated.
India's Tata Group, which bought the Anglo-Dutch company last year, had said earlier that it wants to cut costs by 350 million pounds in both the UK and the Netherlands as it slashes production by 30 per cent, the paper added.
Workers have already agreed cuts in overtime and bonuses but management is pushing for more. Corus has temporarily shut some blast furnaces in Port Talbot, Scunthorpe, and Ijmuiden in the Netherlands.
The FT report said that union officials still hope that the closure of Llanwern could be avoided in return for the pay cut. Talks between the unions are likely to take place on Thursday and they are expected to meet Corus for more discussions in the next fortnight.
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