Tenaris Plans To Cut 1/3 Of The Jobs In Italy

• Unions to start the first strike on 2 October

Tenaris SA, the world"s largest producer of seamless steel pipes, is contemplating cutting about one third of its staff in Italy as part of a "strategic repositioning" of the business. Concurrently, Tenaris Dalmine SpA, the Italian subsidiary of the company, based in Luxembourg, has recently presented a two-year industrial plan, which stipulates investments of some 114 million EUR (166 million USD). "That that will guarantee the company"s long-term continuity," Tenaris officials said.

Reacting to the potential loss of jobs, the trade unions are making preparations for ten-hour strikes at the five factories controlled by Tenaris in Italy, according to a joint press release from the trade union confederations FIM, FIOM and UILM. The first protest is scheduled for 2 October at the Dalmine Factory, near Bergamo, which is the largest Tenaris unit in the country.

Tenaris, whose shares are traded on stock exchanges in Italy, Argentina, Mexico and the United States, is planning to cut costs as the global demand for seamless pipes is collapsing as a result of the global crisis. "The scenario has radically changed; it"s clear there will be structural consequences," said Tenaris Dalmine SpA CEO Vincenzo Crapanzano said. "It"s time for tough, difficult decision," he warned.

According to a Tenaris spokesperson, the company is planning to cut approximately 1,000 jobs over the next two years. Approximately half of the targeted persons would be given an early retirement option. Mirko Rota, an official of the trade union in Bergamo, estimates that the company will shed 1,024 out of 2,814 jobs.

Tenaris is also planning to gradually relocate the production of small-diameter pipes out of Italy to various other steel mills in the group.

Following a significant decline in demand, Tenaris reported a 65 per cent year-on-year collapse in net earnings to 343.3 million USD from the 987.5 million USD reported in Q2/08. Sales plunged 33 per cent to 2.1 billion USD. Deliveries to North America, the company"s largest market, dove 33 per cent to 661 million USD, whereas deliveries to the Middle East and Africa plunged 20 per cent to 452.7 million USD.