Mexico's Pemex cutting petchem jobs to boost efficiency

11 January 2002 23:14  [Source: ICIS news]

MEXICO CITY (CNI)--Mexico's Petroleos Mexicanos (Pemex) is offering early retirement to 370 petrochemical workers in a move analysts said Friday aims to boost efficiency in the division without antagonising labour.

Pemex wants to slash its payroll in a bid to raise its efficiency to world-class standards, as Pemex director general Raul Munoz Leos has promised. But analysts noted that the monopoly's powerful union has historically opposed streamlining efforts.

Populist politicians also are poised to denounce any job cuts even when the cuts aim to make Pemex more competitive.

Munoz Leos so far has avoided controversy after announcing the voluntary retirement decision earlier this week, the financial analyst told CNI.

Munoz Leos plans to eliminate 2000 jobs throughout Pemex, including the 370 petrochemical division positions. The job reductions, say analysts, suggest a long-term commitment to streamlining Pemex without angering the powerful Pemex union, which would oppose forced layoffs.

The 2000 job cuts represent just 1.5% of the Pemex's total 137 000 work force, but the move could lead to further job cuts, the analyst added.

Even with the early retirements, Pemex must take additional aggressive steps to improve its petrochemicals division, analysts cautioned. Late last year, an energy under-secretary said Pemex's eight secondary petrochemicals complexes were in "technical bankruptcy."

The official, Juan Antonio Barges, said Pemex's petrochemicals units run a Peso5bn ($545m/Euro612m) deficit yearly.

Of the 2000 jobs being cut, about 200 will come out of Pemex's basic petrochemicals unit, Pemex Gas y Petroquimica Basica, while another 170 will come from its specialty chemicals division, Pemex Petroquimica.

About 900 of the job cuts will be in the company's crude exploration and production subsidiary, Pemex Exploracion y Produccion. Another 550 jobs will be eliminated in its refineries unit, Pemex Refinacion.

By: Robert Donnelly
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