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U.S. Steel Profit Sharing Falls

Posted on: Wednesday, 9 November 2005, 21:00 CST

By Andrea Holecek, The Times, Munster, Ind.

Nov. 10--Third-quarter profit sharing has fallen more than 75 percent from the previous quarter for U.S. Steel Corp.'s 17,000 union workers, reflecting the company's lower earnings during the period.

Michael Mitchell, president of USW Local 1014 at U.S. Steel Corp.'s Gary Works, said the company's 17,000 United Steelworkers members will receive profit sharing checks for a maximum of $566.40 for the quarter ending Sept. 30 based on the preliminary figure of $1.18 an hour for a maximum of 480 hours.

The figure compares to $2,256 for the second quarter, or $4.70 an hour for the 480 hours.

The company's third-quarter earnings fell more than 56 percent to $107 million from second quarter earnings of $245 million, or $1.88 per share, because of lower spot prices, higher energy costs and two major blast furnace rebuilds, including No. 13 at Gary Works.

"I'm disappointed with that amount," Mitchell said Wednesday. "(The company) said No. 13 blast furnace being down contributed a lot to it. I can't see how it effected the profit sharing that much. They knew they were going to redo it two years ago."

The company had discussed stockpiling or importing steel slabs to keep production at normal levels while the furnace was rebuilt, Mitchell said. The replacement furnace, now labeled No. 14, will be in service during December and at operating at full capability the following month.

"It looks like none of that took place," he said.

U.S. Steel spokesman John Armstrong said taking the blast furnaces off line was only one factor affecting third-quarter earnings. And he repeated his previous statement that profit sharing plan is designed to reward union-represented employees for their important contributions to the success of the company.

Despite Mitchell's disappointment, he said Wednesday that he hasn't received any complaints from his Local's members.

"I don't know whether or not they shared frustrations with their coworkers, but they didn't take it out on me."

Profit sharing checks will be mailed from Pittsburgh today, he said.

Profit sharing is based on consolidated income from operations -- including foreign operations -- measured in profits per-ton shipped, according to the company's annual report. The company's income from operations was $159 million for the third quarter 2005 compared to $413 million for the previous period.

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Source: The Times

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