Serbia Offers Help To U.S. Steel
BELGRADE, Serbia (AP) — Serbia's government will try to avert the closure of its single biggest exporter, U.S. Steel Serbia, despite poor financial results, officials said Tuesday.
The government will form a special team that will offer an "action plan" to help the Pittsburgh-based giant maintain production and keep its work force of over 5,000 people in its factory in Smederevo, some 60 kilometers (37 miles) southeast of Belgrade, deputy Prime Minister Verica Kalanovic said.
U.S. Steel Serbia, which accounts for about 10 percent of the country's exports with $35 million (euro27 million) in 2010, is mulling turning off the second of the two blast furnaces in Smederevo because of mounting losses amid the global economic crisis.
A decision on what to do with the plant, which was purchased from the state for $33 million (euro25 million) in 2003, is likely to be made in Pittsburgh Jan. 31.
"Certainly, the government cannot silently watch the shutting down of such a big system that is so important for thousands of its workers, the town and the state," Kalanovic said.
She indicated that Serbia, which itself is going through deep financial crisis, would help by covering some of the plant's losses with funds from its budget.
Some Belgrade media reports even suggested that the state was willing to buy back the plant from the Americans.
The Smederevo plant, which is operating far bellow its annual capacity of 2.4 million tons, recorded losses of $73 million (euro56 million) for the first nine months of last year.
U.S. Steel's management cited the global economic crisis, anemic economy in southeastern Europe, high raw materials costs and pressure from imports as the causes of the problem.
To reduce costs, the Serbian plant's working week has already been cut to four days amid dropping global demand for its low grade steel.
US Steel's other factory in Slovakia has been more profitable because it makes higher-grade steel for the car industry.