Dec 12 2007
ArcelorMittal announces plans to build a $380 million beam mill in Contrecoeur and the restructuring of its steel production activities in Canada. Flat carbon production will be consolidated in Hamilton (Dofasco Facility) and long carbon production in Contrecoeur (ArcelorMittal Montreal). With this restructuring, the Contrecoeur site will close down its hot mill operations on January 31 and its cold mill operations on February 29.
"ArcelorMittal wants to develop a sustainable Canadian steel business. With the former Dofasco facility now part of ArcelorMittal in Hamilton, it does not make business sense to have Contrecoeur compete with a sister company in the flat carbon segment while Dofasco has unused capacity", stated Jos Jacqué, CEO, Long Carbon, North America. Factors cited are the exchange rate, the cost of metallics and significant increases in iron ore and natural gas prices. In addition, Contrecoeur equipment and facilities are less competitive in today's market.
For employees affected by the restructuring, ArcelorMittal will work with the United Steelworkers (USW) union and government officials to facilitate this transition through regulatory and labour contract mechanisms. There are also recall rights for unionized employees who will be laid off. Staff employees affected will be offered severance packages, as well as counselling services to ease their job transition. More than 450 employees will be eligible for retirement at the Contrecoeur site in 2008 and over 250 of them have already confirmed that they will retire. This context should almost eliminate the impact of job losses on employees.
In addition, ArcelorMittal has confirmed its intention to invest in an 800,000 metric ton state-of-the-art beam mill in Contrecoeur, subject to appropriate agreements. The support of the Québec government has been a determining factor in the company's decision. Once constructed, the new beam mill will employ 200 full time employees and could begin production as early as 2010.
"Our biggest challenge now in Contrecoeur is for management, the labour union and employees, to work together to reduce costs and improve our productivity through operational excellence, simplification, continuous improvement and work flexibility. With everyone's cooperation and this new investment, we have the potential to transform the Contrecoeur facilities and make them some of the best performing mills in North America," concluded Jos Jacqué.
"The best way to create a sustainable model for a steel company is through scale and diversification. With the merger of Arcelor and Mittal Steel, we now have conditions in Canada to move forward and consolidate steel production activities to create sustainable value for our customers, our employees, our shareholders and host communities," said Jos Jacqué.