Profit sharing

US Steel to pay record profit-sharing bonuses on record revenues

US Steel employees will receive a record amount of profit sharing in the second quarter as the company reported a strong performance for the period.

According to the company’s contract with the United Steelworkers union, steelworkers will receive $30.72 per qualifying hour in profit-sharing bonuses. That translates to bonus checks exceeding $14,000 for the three-month period ending June 30, US Steel spokeswoman Amanda Malkowski said, according to The Times of Northwest Indiana.

The bonuses are the “second highest ever after the third quarter of last year”, she noted.

The union had negotiated profit-sharing in 1986, the idea being that workers would forgo wage increases when the company was in trouble, but share the profits when the company made a profit.

“Profit sharing is an important part of our contract, but because the steel business is cyclical, sometimes it pays off and sometimes nothing,” the United Steelworkers said in an update to members.

“That’s one of the reasons we’re focused on getting wage increases in negotiations, because we need guaranteed wages to support our families and pay our bills.”

US Steel’s profit-sharing announcement comes as the company’s second-quarter adjusted net profit hit a record $1.104 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the period hit a record $1.620 billion.

In a video message, US Steel CEO David Burritt thanked employees for the company’s financial performance.

American steel industry

The industry posted record profits in 2021, according to Philip Bell, president of the Steel Manufacturers Association. During an interview with SteelOrbis in December 2021, Bell predicted that investments in steel capacity in the country would total more than $16 billion between 2021 and 2023.

In 2018, then-President Donald Trump exercised his power under Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on steel imports , a move that would have benefited domestic steelmakers.

In a July 8 brief, Nucor Corp., one of America’s largest steelmakers, said the nation’s steel industry was “in a state of crisis” when the Commerce Department opened the investigation under the article 232 on steel imports in 2017.

The US steel industry was operating at a utilization rate of just 74% in 2017, with imports severely affecting the domestic industry. The passage of Section 232 contributed to a “stable market environment” for domestic steel producers.

Between 2016 and 2021, steel production in the United States, for example, increased from 86.5 tons to 95 million tons. In 2017, steel imports were around 34.7 million metric tons, which fell to 28.6 million metric tons in 2021.

“After operating at a loss for five of the nine years prior to the Section 232 response, the industry has returned to more stable profitability,” the brief states.

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Naveen Athrappully is a reporter who covers world affairs and events at The Epoch Times.