IMF argues against job losses at OECD Steel Committee

GLOBAL: IMF representatives, senior government officials and industry representatives from major steel-producing economies met in Paris on June 8-9 at the OECD Steel Committee. Participants heard how in virtually all economies, the global economic crisis has led to a sharp contraction in steel production, consumption, prices, trade and employment.

Most steel using sectors have experienced sharp output contractions over past months, especially the automotive sector, pushing world steel demand to its lowest level in several years. Demand for steel is particularly week in North America, Europe, the CIS and Japan, but is now showing more stability in some emerging economies such as China, India and Brazil. Risaburo Nezo, Chairman of the OECD Steel Committee stated that, "there is considerable uncertainty as to the timing of the steel industry recovery. A moderate upturn might occur towards the end of 2009 but could well be delayed by a further six to nine months into 2010."

Reacting to comments from industry representatives Rob Johnston, Director IMF Steel Department, informed participants that the trade unions did not believe that the burden of the current crisis such be put on workers through major job losses or cuts to benefits. Steel employers were slow to reward employees during the recent peak demand but have quickly tried to claw back benefits as a result of the current crisis. The crisis however is not a steel crisis as before but a financial crisis that has impacted on the steel industry, as a result there should be no forced job losses or closures.  The IMF's submission made it clear that trade unions had acted as guardians of the steel industry in the past and that was a role that they where prepared to take up again.

Copies of all submissions made to the Committee, including the IMF's submission, are published on the OECD website at the following address: http://www.oecd.org/document/40/0,3343,en_2649_34221_42965160_1_1_1_1,00.html