Gloomy forecast

Press, 1 September 1982, Page 24

Gloomy forecast

PA Melbourne The general manager of the BHP steel division. Mr David Rice, forecast a further rundown of the group’s steel activities, more job losses, and an increase in the price of domestic steel, after the Federal Government's refusal to grant additional protection. Mr Rice said that the squeeze on Australia's steelmaking and fabricating industries would intensify. The Government did not boost protection levels for BHP and allowed steel imports to continue al present levels.

The Prime Minister. Mr Malcolm Fraser, argued that taxpayers' dollars would not be used to prop up the ailing steel industry. Last month. BHP executives were confident of winning further protection, and analysts said that BHP would now find it harder to bargain with the Govern-

ment for extra help after the Government's firm stand on the Temporary Assistance Authoritv report.

Mr Rice said that the decision meant another contraction in the local market for domestic steel and rising imports. He said that the number of redundancies in the steel division would increase beyond the scheduled rate of job losses, but he could not give a precise figure. BHP executives said last month 2500 jobs would be axed this financial year, most of them in the steel division.

Mr Rice said the winddown of some steel activities would accelerate, and more production cuts would be necessary.

He said he could not detail the areas to be affected because changes were in the planning stage. "But we're not by any means giving up," he said. "It's a great challenge."

He said that BHP would press ahead with its case for longer-term assistance. The Industries Assistance Commission recently held public hearings on the issue of further protection for BHP’s steel division.

Mr Rice said BHP had pointed out to the Temporary Assistance Authority that, prices tended to escalate during a shrinking and sluggish market.

He said prices were directly related to costs, and price increases were necessary to cover increasing production costs. "Prices will have to rise in the coming year.' he said. "In considering price increases, we will be mindful of the effect of rises on our customers."

levels at current duty rates." he said.

“Imports above the quota level would be subject to an additional temporary duty of 150 per cent.”.