ArcelorMittal doubled its earnings to $1.21 billion in the second quarter, but local steelworkers are not sharing in the wealth because the company said it lost $6.7 million in the United States last quarter.
The Luxembourg-based steelmaker negotiated a profit-sharing agreement with the United Steelworkers union in the 2015 contract, and it's tied to the company's quarterly results. If the steelmaker turns a profit in any given quarter, steelworkers take home a piece of the pie.
ArcelorMittal, however, is not paying out profit-sharing bonuses to local workers in Northwest Indiana this month because it says its U.S. operations were not profitable in the third quarter of 2017.
"The 9/1/15 USW agreement provides for a profit-sharing pool of 7.5 percent of the company's profits, defined as Earnings Before Interest and Taxes," ArcelorMittal said in a letter to USW Local 1010. "The company reported an unaudited edit of -$6,735,137.18. As a result, there was no profit sharing generated for the pool using the Basic Labor Agreement calculations."
The global company, about half of which is based in Europe, said the bulk of its third-quarter profits came from its overseas operations.
"ArcelorMittal has grown through the acquisition of numerous steelmaking and other assets, which constitute our major operating subsidiaries," spokeswoman Mary Beth Holdford said. "ArcelorMittal reported net income of $1.2 billion in Q3 2017, but ArcelorMittal USA only represents a portion of the global company. The company is divided into five operating segments: NAFTA, Brazil, Europe, ACIS and Mining. All operating subsidiaries belong to one of these segments. ArcelorMittal USA is a part of the NAFTA business, which includes flat, long, tubular and tailored blanks operations in the USA, Canada and Mexico."
Steelworkers at ArcelorMittal's local operations in East Chicago, Burns Harbor, Gary, Riverdale and New Carlisle will take home bonuses tied to the price of hot-rolled steel. Hot-rolled steel was selling for $661 per ton in the United States as of Oct. 23, according to Steel Benchmarker.
As a result of the higher prices, they'll take home an extra $0.50 per eligible hour worked.