Stelco to cut 725 jobs

Smaller workforce, increased production and cost cutting to boost steel maker's profits

Canada's second largest steel maker will cut another 725 jobs, or 15 per cent of its workforce, later this year.

Stelco Inc's new chief executive officer Rodney Mott announced the cuts, which will reduce the workforce to about 4,125, at the annual shareholder's meeting last week.

The Hamilton-based company is offering $20,000 buyouts for workers who are eligible to retire and packages worth one-year's pay to some salaried staff.

The programs will cost $25 million but Stelco estimates they will save the company $45 million annually.

The job cuts are just part of the steel maker's plan to increase annual revenues by about 33 per cent and climb out of the financial troubles that led it to file for bankruptcy protection two years ago.

The company also plans to boost productivity by 40 per cent, cut capital spending from $160 million to $100 million and eliminate the use of outside contractors.

The company's latest negotiations with its union, the United Steelworkers Local 1005, indicate the culture is changing, Mott told shareholders. The union signed a new four-year contract one month before the old one expired.

Under the terms of the new contract, the company instituted a productivity bonus and profit sharing for workers and the union agreed to cut job classifications to improve flexibility for the company.

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