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U.S. Steel to cut 175 salaried workers in Canada

| Tuesday, Feb. 4, 2014, 1:09 p.m.

U.S. Steel Corp. said on Tuesday it will eliminate 175 salaried, non-union workers in Canada as part of its companywide plan to reduce costs and increase efficiency.

Employees at U.S. Steel Canada's Hamilton Works in Hamilton, Ontario, its Lake Erie Works in Nanticoke, Ontario, and its corporate services division headquarters in Hamilton will be affected, said spokeswoman Courtney Boone in Pittsburgh.

Boone could not comment on job cuts. The company is under pressure to improve its stock and financial performance. Last week, it reported a fifth consecutive year of losses, including a fourth-quarter loss of $122 million.

“After taking a very close look at our operations for opportunities to make them more profitable and improve our cost structure, we have made the difficult decision to reduce our non-represented employment levels,” said Michael A. McQuade, who was named president and general manager of U.S. Steel Canada last month.

“The reduction is a part of an across-the-board program to reduce high administrative costs,” he said in a letter to employees. “This decision was not made lightly, but it is necessary to control our costs and help move our company into an era of sustained profitability.”

U.S. Steel Canada employs 723 non-union and 1,656 union workers, according to Boone. The company intends to notify employees by Feb. 12. They will receive severance benefits and outplacement assistance.

The company's program to improve operations, dubbed the “Carnegie Way,” has resulted in annual cost reductions of $175 million, executives said last week.

The savings include $100 million from unidentified projects and $75 million announced in October, mainly related to the shutdown of a steelmaking plant at its Hamilton Works, closing two aging coke plants in Gary, Ind., and other moves. Of that total, $150 million will be realized in 2014, said Chief Financial Officer David B. Burritt.

“We are examining all aspects of our business,” Burritt said last week in discussing the company's earnings report. “We are going to make struggling businesses profitable or admit we can't and exit them.”

CEO Mario Longhi said U.S. Steel intends to use an electric furnace and scrap metal to produce steel, replacing an aging blast furnace at a plant in Fairfield, Ala. The furnace, which is expected to be completed by mid-2017, would be more efficient and less expensive. The Fairfield blast furnace needs at least $100 million in upgrades to extend its life.

U.S. Steel shares rose 16 cents to $25.22 on Tuesday.

John D. Oravecz is a Trib Total Media staff writer. Reach him at 412-320-7882 or joravecz@tribweb.com.

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