Union may urge strike over Steel cuts

British Steel employees may be urged to take industrial action over plans by the company to transform working practices and accelerate the programme of job cuts, the steel workers' union, the Iron and Steel Trades Confederation (ISTC) warned yesterday.

Keith Brookman, ISTC general secretary, met British Steel's personnel director, Alan Johnston, in London to hear details of the group's five- year plan to introduce team working and reduce layers of management. He also disclosed it would cost pounds 30m a year to implement, costing British Steel pounds 150m for the five-year programme.

No figures for job losses were mentioned though Mr Brookman said British Steel would "have to recoup that money from somewhere".

He added: "If an employer takes advantage of the workforce there's always the possibility of industrial action ... it's essential that there must not be any compulsory redundancies."

Mr Johnston said reports of 10,000 job losses over five years, double the current envisaged rate by the group, were "pure speculation". However, he said about 10 per cent of the workforce was of "pensionable age" and repeated that the 20 per cent surge in the value of the pound last year had damaged British Steel's competitiveness, though this was only one factor in the changes. He again refused to rule out compulsory job cuts and denied the move was a knee-jerk reaction to the rise in sterling.

"We didn't speak about jobs in the meeting. We were talking about a new plan for a jobs package ... There's no new five-year plan we've discussed with the troops. It's a budget plan for one year," Mr Johnston said.

Last year British Steel was squeezed by the rise in the pound against the German mark and a drop in steel prices of as much as 30 per cent on world markets. The company's profits are forecast to more than halve from pounds 1.1bn in the year to March 1996 to below pounds 500m this year and could drop further to pounds 350m in 1997-98. Every 10 per cent increase in the value of the pound knocks pounds 100m off British Steel's profits.

It emerged yesterday that Sir Brian Moffat, British Steel chairman, briefed unions on the problem last month, shortly before officials received a private letter from him warning of the likelihood of job losses. He told them: "Our profits in January this year were significantly lower than January a year ago and yet this year we made more steel." The group is Europe's largest steel producer and the world's third biggest.

The ISTC said no decisions on industrial action would be taken before a long period of consultation with the workforce. Mr Brookman insisted relations with management remained good, despite the jobs warning.