The
Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator
for permission to post the following article by Reporter Jennifer Morrison
published in the January 3, 2004 edition
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Jan. 3, 2004.
12:53 AM |
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STELCO TO CUT COSTS |
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New president and CEO outlines priorities 'to make
Stelco competitive in the marketplace and to rebuild its operational and fina |
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By Jennifer Morrison |
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Cost reductions are at the top of the
priorities spelled out by Stelco's new boss to bring the floundering company
back to profitability. After less than 48 hours on the job, the
top executive at Hamilton's embattled steelmaker issued a statement outlining
a need to work with stakeholders to achieve "necessary cost
reductions" and undertake "other measures." Courtney Pratt, who took over as president
and CEO of Stelco Inc. Thursday, said that the "major challenge"
will be to improve productivity, while lowering costs to make the company
more competitive. "We will be looking to our
stakeholders to work co-operatively to achieve necessary cost reductions and
undertake other measures to make Stelco competitive in the marketplace and to
rebuild its operational and financial capability," Pratt said in a
statement released yesterday. "We are not a cost of production, we
are the ones who make the steel," replied Rolf Gerstenberger, president
of the United Steelworkers Local 1005, representing the 3,600 workers. After reading a copy of Pratt's statement,
Gerstenberger was not convinced job cuts and concessions will not be coming
in the near future. "When I read the release I was a
little bit disappointed. Mr. Pratt is the new CEO and what he's saying is
what I've been hearing from past presidents and CEOs for nine months." Gerstenberger worries that what might be
coming mirrors what happened last summer, when the struggling steel company
asked its steelworkers across the chain to take a 20 per cent cut in wages
and benefits as part of a drive to slash labour costs. "It looks like the same thing. If
they make the same proposal, it will be the workers who decide what path they
take," he said. Last year was not a good one for Stelco
Inc., which lost $168 million in the first nine months on revenues of about
$2 billion, and saw its shares teeter between a 52-week high of $4.85, to a
low of 93 cents. Trading on the Toronto stock market, Stelco shares gained
four cents yesterday to close at $2.49. "Stelco's current circumstances
provide a major challenge for me and our senior management team," Pratt
said in the statement. "While many companies in the North
American steel sector are experiencing appreciating share prices, reflecting
improved pricing on a variety of steel products and higher sales volume from
a general rebound in the manufacturing sector, Stelco continues to produce
losses and consume considerable amounts of cash." Pratt, 56, a long-time executive who most
recently served as president of Toronto Hydro Corp., won't be coming into his
new position completely blind. He's served on the company's board of directors
for nearly two years as chairman of the human resources and compensation
committee and as a member of the pension committee. His experience on the pension committee
will be useful in dealing with yet another enormous problem facing the steel
giant -- its 17 pension plans have a combined deficit of $650 million and
retirement costs will take $100 million in cash off the bottom line this
year. Pratt has also been involved in shaping
the wide-ranging strategic review which Stelco hopes will reshape the company
for the future by selling some divisions and dropping some product lines. Married with two sons, Pratt has an
honours bachelor of arts degree in economics and political science from
McGill University and an honorary doctorate from Royal Roads University. He's declined interviews since being named
Stelco's new president and CEO in November, replacing Fred Telmer. jmorrison@thespec.com 905.526.3283 |