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Severstal Reduces U.S. Staff
Suffering from decline in demand caused by the global financial turmoil, Russia’s steel giant Severstal intends to set off on unscheduled vocation 800 workers of its U.S. subsidiary, Severstal Wheeling Holding, which corresponds to roughly 20 percent of the overall labor force of that company. Other metal makers of Russia, for instance Evraz and TMK, will feel the crisis aftereffects as well.
West Virginia’s The Intelligencer reported yesterday that Severstal Wheeling Holding intends to send on unscheduled vocation up to 800 workers, more than 20 percent of its labor force. Severstal bought Severstal Wheeling Holding (former Esmark Inc) in June for $1.25 billion but only to face ailing demand blamed on financial crisis.
People in Severstal didn’t confirm the reduction in personnel but acknowledged difficulties on the U.S. market. Severstal chief Alexei Mordashov met with representatives of Severstal Wheeling Wednesday. Spokesmen of United Steelworkers (USW) Trade Union hoped the company would confine itself to temporarily vocations of no longer than a week.
In the recent years, the metal makers of Russia have been carried away by the acquisition of the U.S. assets. This year, Evraz Group has bought Oregon Steel for $2.3 billion and the pipe business of Canadian-U.S. IPSCO for $4.025 billion, reselling the U.S. pipe plants to TMK for $1.7 billion in the next effort. Like Severstal Wheeling, the U.S. subsidiaries of Evraz and TMK may encounter difficulties very soon, the analysts apprehend.
www.kommersant.com
All the Article in Russian as of Oct. 10, 2008
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