Wednesday, August 04, 2004
Yahoo! News - Steel prices raise profits at Stelco and others, but good times won't last: "Stelco also indicated it's in position for a profitable third quarter as well, saying it has raised some of its prices to reflect continuing robust demand from automotive and construction clients.
But company officials went on a media blitz Tuesday to downplay the results, stating in separate conference calls held with Bay Street analysts and reporters, as well as in a letter to employees, that currently high steel prices are 'not going to last.'
'It's unsustainable,' Stelco president and CEO Courtney Pratt said during the conference call with analysts.
'Like everyone else, we don't believe we're going to sink down to the lows that we've seen in other cycles. But we certainly cannot stay at these elevated prices for too long.'
Stelco has been operating under bankruptcy protection since late January. The United Steelworkers challenged and is continuing to question Stelco's claim of insolvency, saying that the steel market was just about to boom before the company entered court protection from creditors.
The Steelworkers claim Stelco is using federal laws to slash wages, benefits, pensions and jobs - possibly well beyond the near 600 positions it has eliminated in Hamilton through attrition over the past 12 months. The company maintains it needs to reduce its overall cost structure so it can attract capital to finance needed renovations and mill upgrades.
'Stelco still faces a serious viability issue and must reduce costs, improve productivity and focus on key operations and products in order to become more competitive and remain profitable throughout the cycle,' Stelco chief financial officer Bill Vaughan told analysts. "
But company officials went on a media blitz Tuesday to downplay the results, stating in separate conference calls held with Bay Street analysts and reporters, as well as in a letter to employees, that currently high steel prices are 'not going to last.'
'It's unsustainable,' Stelco president and CEO Courtney Pratt said during the conference call with analysts.
'Like everyone else, we don't believe we're going to sink down to the lows that we've seen in other cycles. But we certainly cannot stay at these elevated prices for too long.'
Stelco has been operating under bankruptcy protection since late January. The United Steelworkers challenged and is continuing to question Stelco's claim of insolvency, saying that the steel market was just about to boom before the company entered court protection from creditors.
The Steelworkers claim Stelco is using federal laws to slash wages, benefits, pensions and jobs - possibly well beyond the near 600 positions it has eliminated in Hamilton through attrition over the past 12 months. The company maintains it needs to reduce its overall cost structure so it can attract capital to finance needed renovations and mill upgrades.
'Stelco still faces a serious viability issue and must reduce costs, improve productivity and focus on key operations and products in order to become more competitive and remain profitable throughout the cycle,' Stelco chief financial officer Bill Vaughan told analysts. "
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