Liberty Ostrava is temporarily shutting down blast furnace 2 because of lower demand due to coronavirus.
The company will reduce pig iron production by 20 percent. The shutdown affects 400 employees. The unions disagree with shutting down the blast furnace for several months and are concerned about the company’s future.
The company says the shutdown is in response to the slowdown of the European steel market, citing a decline in orders of 30 percent. The company says it can maintain its current staffing levels without the need for any layoffs.
The CEO of Liberty Ostrava Pascal Genest said the pandemic has disrupted the European steel and related industries. “We have carefully prepared the blast furnace…and will shut it down by the end of April. The furnace will return to full operation by the end of August. However, if the market improves, we will hasten it in a month,” Genest said. He emphasized they will be able to meet their customer’s needs despite the loss of production capacity.
Blast furnace # 2 will be put into maintenance mode, allowing it to return to operation as soon as the situation improves. Affected employees will be assigned to different jobs in the plant on a rotating basis. They will collect 70% of their pay while home and will rotate back in to work full time for full compensation.
The unions have come out against the shutdown of one blast furnace. They say the impact of the pandemic has been minimal, and the shutdown poses a risk to the company’s future stability.
Liberty Ostrava makes steel for the construction, engineering, and petrochemical industries. It supplies products to more than 40 countries. The production capacity of the company is 3.6 million tons. Liberty has 6,000 employees, including its subsidiaries. The plant is part of the Liberty Steel Group, a subsidiary of GFG Alliance owned by businessman Sanjeev Gupta.