Despite Luxembourg-based ArcelorMittal's $2.37 billion profitable first quarter, hourly workers at its domestic mills will not receive profit sharing for the period.
"It's (profit sharing pool) zero," said Matt Beckman, secretary to the grievance committee of United Steelworkers Local 1010, which represents hourly workers at the company's Indiana Harbor East plant in Burns Harbor. "The pool is based on the company's U.S. results."
ArcelorMittal USA employs about 3,000 USW members at its Burns Harbor plant and almost 5,000 at two East Chicago plants.
The profit-sharing pool for ArcelorMittal Steel USA is established by multiplying a variable percentage by its, not the corporation's -- Earnings Before Interest, Taxes, Depreciation and Amortization -- at various thresholds of profitability. There is no profit sharing if the amount per ton falls under $24.99. For the quarter, the unaudited Adjusted EBITDA per ton was $19.67
The steelworkers were "very upset" by the news, Beckman said.
A 10-year-veteran Local 1010 member from Portage said he and his fellow steelworkers find it difficult to understand why they aren't receiving profit sharing at a time when the company is making huge profits and getting record prices for its products.
In the fourth quarter 2007, when the company earned $1.68 billion, qualified USW workers received $197.81 in profit sharing, based on $0.317 per hour. At that time, it was the lowest profit sharing awarded for the past eight quarters.
ArcelorMittal spokesman David Allen said Friday he could not comment on the profit sharing. But in a letter to workers, ArcelorMittal USA President and Chief Executive Officer Michael Rippey stated the company's first quarter financial results were "significantly below expectations due to the continuing escalation in raw material prices, delays in raw material receipts and our inability to achieve planned operating reliability.
"In spite of the issues experienced in the first quarter, we still have an excellent opportunity to achieve future quarterly payouts if we work safely and execute our operations in a timely, efficient, and cost-effective manner," Rippey said.
