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ArcelorMittal Kryviy Rih to Implement Shortened Workweeks
06/01/2009 - ArcelorMittal Kryviy Rih announces plans to reduce salary costs by implementing a reduced, three-day workweek.
In the face of continued deterioration of the world economy, ArcelorMittal Kryviy Rih, Ukraine, has announced plans to reduce salary costs by implementing a reduced, three-day workweek.
“We are a steel company and we want to make steel. But the reality is, there is no point in continuing to make what we know we cannot sell,” said ArcelorMittal CEO Lakshmi Mittal.
The company noted that up to now, ArcelorMittal Kryviy Rih (OJSC) has tried to avoid implementing initiatives that would have led to salary cuts. However, production within the enterprise has continued to decrease drastically.
“In front of the remaining crisis, the enterprise will have to adapt. Now we need to reconsider our approaches to give no advantage to our competitors,” noted ArcelorMittal Kryviy Rih CEO Jean Jouet. He said that extensive analysis had shown that fixed costs would also have to be reduced, a requirement that could not be achieved without initiative on salary costs.
“In any case it will be a TEMPORARY initiative, to be canceled while market recovery is there,” said Jouet. He explained that various scenarios had been discussed, including reduction of production bonuses for all workers, the implementation of short workweeks for daily shift employees. Scenarios were studied in accordance with the laws of Ukraine.
The company noted that up to now, ArcelorMittal Kryviy Rih (OJSC) has tried to avoid implementing initiatives that would have led to salary cuts. However, production within the enterprise has continued to decrease drastically.
“In front of the remaining crisis, the enterprise will have to adapt. Now we need to reconsider our approaches to give no advantage to our competitors,” noted ArcelorMittal Kryviy Rih CEO Jean Jouet. He said that extensive analysis had shown that fixed costs would also have to be reduced, a requirement that could not be achieved without initiative on salary costs.
“In any case it will be a TEMPORARY initiative, to be canceled while market recovery is there,” said Jouet. He explained that various scenarios had been discussed, including reduction of production bonuses for all workers, the implementation of short workweeks for daily shift employees. Scenarios were studied in accordance with the laws of Ukraine.
“Finally, we have chosen the most appropriate and effective solution: reduce working week to three days,” said Jouet. “We understand that this is an unpopular measure. But the task of management is to preserve the potential of the enterprise, and to prepare the ground for the period when favorable conditions for ArcelorMittal Kryviy Rih come, and the enterprise could rehabilitate its capabilities, to reach better results — refreshed, strong, united as a team to achieve a common goal,” he added.
