Russel Metals Announces Actions to Reduce Operating Expenses
23 Februar 2009 - 8:07PM
Marketwired
Russel Metals Inc. (TSX: RUS) today announced that it has put in
place cost containment measures to significantly reduce annual
operating expenses in the current economic environment.
Starting at the top, the Board of Directors have taken a 10%
reduction in their cash compensation, retroactive to January 1,
2009. In addition, the salaries of the CEO, COO, CFO and other
Corporate employees are being reduced by 10%. Our operations have
implemented lay offs, reduced working hours or taken salary
reductions to align costs with demand. We anticipate headcount
reductions of approximately 500 employees throughout our
organization by the end of the first quarter of 2009 from peak
levels of approximately 3,000. These actions are expected to result
in an aggregate net decrease in operating costs of more than $25
million in 2009.
Brian Hedges, EVP & COO stated "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.
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. The Company's Management
has taken these actions because the decline in steel prices, energy
prices and demand experienced during the last two months has
exceeded anything previously experienced. The Company has
experienced demand declines in the first two months of 2009 similar
to the 40% declines announced for January by the Metals Service
Center Institute."
Russel Metals is one of the largest metals distribution
companies in North America. It carries on business in three
distribution segments: metals service centers, energy tubular
products and steel distributors, 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-Ennis.
Contacts: Russel Metals Inc. Marion E. Britton, C.A. Vice
President and Chief Financial Officer (905) 819-7407 Email:
info@russelmetals.com Website: www.russelmetals.com
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