British Steel has set its workers tough annual performance targets as it continues to cut its workforce.
Failure to meet these targets could result in businesses being ‘sold off or closed’, said chairman Sir Brian Moffat.
Unveiling a 30% drop in pre-tax profits for the year to March 1998 of £315m on turnover down 4% to £6.9bn, the steel group said it was aiming to achieve annual pre-tax returns from its businesses of about £700m, averaged over the next six to seven years.
Analysts were sceptical whether the group could achieve such targets while sterling remains strong.
The pound’s surge against the deutschmark wiped more than £500m off group profits last year. But Moffat said most of the group’s businesses ‘had every opportunity to meet these averages’.
British Steel cut 2,400 jobs in the year to April 1998. Analysts predict that up to 12,500 jobs could go by March 2001 as part of the group’s cost-cutting drive.