ArcelorMittal suspends incentives for salaried workers

By Andrea Holecek, Times of Northwest Indiana
andrea.holecek@nwi.com

CHICAGO | ArcelorMittal USA has suspended or frozen several programs that boost the pay of its salaried workers as it continues its efforts to keep costs in line with revenues, a company letter obtained by The Times Monday states.

Salaried workers recently received the letter from company President and Chief Executive Officer Mike Rippey stating the bonus programs for merit, profit sharing, special target incentives, production incentives and management incentives would be suspended immediately.

The action is part of its "necessary adjustments which are critical to helping us sustain our business with a focus on specific objectives in terms of cash, customers and cost," the letter states.

ArcelorMittal has cut production, idled furnaces and plants and cut hourly workers and hours in the past six months to keep pace with falling demand in a struggling economy. It reported a $2.63 billion loss for the fourth quarter 2008 compared to its profit of $3.8 billion for the third quarter and a profit of $2.4 billion in the fourth quarter 2007.

The company has declined to comment on the recent action, but Rippey's letter states that the global economic slowdown continues with no company or industry untouched by this crisis.

"This is an unprecedented situation, the significance of which cannot be underestimated," Rippey states in the letter.

Tom Hargrove, president of United Steelworkers Local 1010 at ArcelorMittal Indiana Harbor East, said he has seen the letter but doesn't believe the company's action would have a major effect on any salary incentives based on production.

The company's USW workers received no profit sharing for the fourth quarter and don't expect any for the current period, he said.

"The way it is in the industry right now, I don't think there would be any payouts even if they didn't suspend them," Hargrove said.