Romanian Cos Unfolding Contracts With ArcelorMittal Galati Laid Off Over 300 People

Agency head Carmen Tofan said Monday that the number of layoffs has increased in recent days in Galati, adding that companies unfolding contracts with ArcelorMittal Galati are the ones facing the most problems, which push them to downsize their operations.

SC Atlas, one of the companies that resorted to layoffs and downsized its transport operations, has most of its contracts signed with ArcelorMittal Galati.

Romica Garneata, head of Cartel Alfa Galati union federation, said Atlas SA Galati had 450 employees until November 1, stressing its core activity targets transport operations and most of its contracts are with ArcelorMittal Galati.

Reuters recently informed that, in the light of the global economic crisis, ArcelorMittal Group, the world’s largest steel company, reconsiders priorities in its development program, while Financial Times said last week that the company is reanalyzing its $35 billion development plan, which spans over eight years and targets investments of $20 billion in two new factories in India.

Strong demand combined with high steel prices enabled ArcelorMittal to successfully overcome the initial phase of the global economic crisis, but the company’s shares dropped 72%, compared with the highest level reached early June, along with the decrease in consumer good prices.

Last month, ArcelorMittal said it would downsize production by up to 15%, mainly on the segment of long steel products, to back the increase in prices on the market.

ArcelorMittal group reported sales of $67.6 billion in the first half of the year, up 31% on the year, and a 65% increase in its net profit, to $8.2 billion.

ArcelorMittal Group owns four steel plants in Romania, namely Mittal Steel Roman, Mittal Steel Galati, Mittal Steel Iasi and Mittal Steel Hunedoara, as well as port operator Romportmet Galati and the local unit of construction company ArcelorMittal Construction.