TORONTO, ONTARIO--(Marketwire - Feb. 23, 2009) - 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.
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