Russel Metals Initiates Actions to Reduce Operating Expenses
02/24/2009 - Russel Metals commences cost containment measures including layoffs, reduced working hours and salary reductions that are expected to result in an aggregate net decrease in operating costs of more than $25 million in 2009.
Russel Metals Inc. has commenced cost containment measures to significantly reduce annual operating expenses. The company expects these measures, which will include layoffs, reduced working hours and salary reductions, to result in an aggregate net decrease in operating costs of more than $25 million in 2009.
The company’s operations have implemented lay offs, reduced working hours or taken salary reductions to align costs with demand. The company anticipates headcount reductions of approximately 500 employees throughout the organization through the end of the first quarter of 2009 from peak levels of approximately 3000.
The company’s operations have implemented lay offs, reduced working hours or taken salary reductions to align costs with demand. The company anticipates headcount reductions of approximately 500 employees throughout the organization through the end of the first quarter of 2009 from peak levels of approximately 3000.
The company’s Board of Directors also have taken a 10% reduction in their cash compensation, retroactive to January 1, 2009, and the salaries of the CEO, COO, CFO and other corporate employees are being reduced by 10%.
"Our compensation plans also have a very strong variable component which is performance based and this is expected to result in significant additional expense reductions in the current year, based on current activity levels,” stated Brian Hedges, Executive Vice President & Chief Operating Officer. “Operating expenses will be reduced by up to an additional $70 million across the company if certain performance thresholds, which are closely tied to earnings, are not met.
Russel Metals, one of the largest metals distribution companies in North America, carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors. The company conducts business under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec Industries, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Enni
