Austrian steelmaker voestalpine claims that the coronavirus pandemic and its consequences are causing major economic challenges for the company.

"As a result of massive reductions in capacity and current production shutdowns in the automotive, aerospace, mechanical engineering, and oil & natural gas industries, in just a few days demand in the key voestalpine customer segments has collapsed," the company said, adding that in order meet the required level of flexibility over the next weeks and to secure jobs, short-time work is being registered in around 50 European Group companies (in Austria as well as in Germany, Belgium, and France).

Because of the severe impact the coronavirus is having on the global economy the company is falling back on the short-time work model in Austria, introduced by the Federal Government in response to the crisis. The model enables a temporary reduction in normal working hours, for almost all the Group companies in Austria, and, depending upon the respective regulations, will take advantage of similar models being offered right across Europe.

"The actual extent of short-time work will become clear over the next weeks, and will be determined by the levels of capacity utilisation in production," the company said.

voestalpine intends to implement alternative measures as appropriate in countries where no such short-time work models exist. Several sites in countries including France, Italy, Peru, Brazil, and the USA have already been temporarily closed. The aim is to minimize the negative impact on employees and the company as much as possible. "From the current viewpoint, the impact on the results for the current business year 2019/2020 cannot be sufficiently determined," the company added.

Herbert Eibensteiner, chairman of the management board of voestalpine AG, commented: “When our customers significantly reduce their level of demand, stop production, and supply chains temporarily come to a standstill, we need to react promptly."

The company claims it is currently making major efforts to protect the health of those employees still working in production.

"In these difficult times, my particular thanks goes to those who are still hard at work in production," said Eibensteiner. "They are making a vital contribution to maintaining our critical infrastructure at many plants. In other areas, too, the tireless efforts of many employees are proving vital in helping to keep our company going. Over the next months we will need to fight hard for every single job".

Voestalpine believes that short-time work is a first step in mastering the economic crisis created by the coronavirus

The company is being forced (by the virus) to reduce production in specific areas, including reducing pig iron capacity at the Linz site by around 20% and by temporarily shutting down a small blast furnace.

“The coronavirus pandemic is facing voestalpine with its greatest economic challenge of the past decade. Registering for short-time work on a large scale across Europe is designed to achieve the clear objective of retaining our highly qualified employees within the Group. The Austrian Government’s new short-time work model is a positive and sensible measure in this respect. As an enterprise, it allows us to respond quickly and in a flexible manner to this unparalleled crisis,” Eibensteiner added.

Short-time work has also been registered in Germany, Belgium, and France. Currently, no compulsory redundancies are planned in Austria.The numbers of leasing employees will continue to be reduced, and accumulated overtime and holidays cut back further.

The company claims that its greatest priority is designing measures to protect the health of voestalpine employees working in production. In addition to strict hygiene regulations and maintaining a safe distance from others, measures such as changing shift models have been taken to significantly reduce the physical presence of employees in operationally critical areas. Where feasible, employees are working from home.