Saturday, November 20, 2004
Big Steel faces its next revolution
The Globe and Mail: "Firms are enjoying record prices, but the race for global dominance points to a massive shakeout
Employees at Algoma Steel Inc. have seen some tough times. Twice in the past decade, the Sault Ste. Marie, Ont.-based steel maker has claimed court protection from creditors. Just 18 months ago, it laid off 600 people, roughly one-fifth of its work force. But last July, the remaining Algoma workers reaped the rewards of retrenchment. Flush with cash from booming steel prices -- up 2? times from 2003 levels -- the company distributed profit-sharing cheques worth up to $10,000 each to every one of its 3,000 employees.
But for Algoma, the bounty brings its own dangers. Small by global standards, the company has become a fat target for predatory investors who, tempted by its swelling cash hoard, could either run the company or find an international buyer for its efficient mills. Earlier this week, Algoma took defensive action -- announcing a shareholder rights plan designed to thwart anyone from gaining control at bargain prices."
Employees at Algoma Steel Inc. have seen some tough times. Twice in the past decade, the Sault Ste. Marie, Ont.-based steel maker has claimed court protection from creditors. Just 18 months ago, it laid off 600 people, roughly one-fifth of its work force. But last July, the remaining Algoma workers reaped the rewards of retrenchment. Flush with cash from booming steel prices -- up 2? times from 2003 levels -- the company distributed profit-sharing cheques worth up to $10,000 each to every one of its 3,000 employees.
But for Algoma, the bounty brings its own dangers. Small by global standards, the company has become a fat target for predatory investors who, tempted by its swelling cash hoard, could either run the company or find an international buyer for its efficient mills. Earlier this week, Algoma took defensive action -- announcing a shareholder rights plan designed to thwart anyone from gaining control at bargain prices."
