German Steel Industry to Seek Lay-Off Funds

The West German Government will be asked June 16 to provide nearly 850 million marks (470 million dollars) to lay off or retrain 20,000 steel workers whose jobs are threatened by the recent slump in the country’s steel industry.

Government spokesman Friedhelm Ost said Chancellor Helmut Kohl will review a joint proposal by steel employers and trade unions at a meeting on the ailing industry tomorrow.

Both steel employers and union leaders are expected to tell Kohl tomorrow that the Government has failed to do enough to protect German steel firms from subsidies and unfair competition from other European Community members.

Government sources said Bonn was prepared to take part in a common effort to find a solution for the steelworkers. But since the Government is struggling to finance tax cuts by slashing state subsidies, it is not prepared to pick up the whole bill for the layoffs, the sources said.

A spokesman for IG Metall, the metalworkers’ trade union, said the proposal seeks redundancy payments to 10,000 workers in Ruhr and Rhineland plants. Some 6,000 workers would be redeployed in non-steel making sectors of steel companies, while a further 4,000 would be eligible for job-retraining schemes.

The union estimates that the redundancy payments would total 600 million marks (340 million dollars), while job retraining schemes would cost a further 240 million marks (130 million dollars).

Up to 30,000 West German steel jobs are at risk in the next few years following steep losses incurred by the industry since mid-1986.

Extensive restructuring of the industry in recent years was unable to compensate for the effects of the weak dollar which depressed foreign demand for steel, industry sources said.