U.S. Steel employees are all set to receive a record amount in profit-sharing as the company registered a strong second-quarter performance.
According to the company’s contract with the United Steelworkers union, steelworkers will receive $30.72 per qualifying hour in profit-sharing bonuses. For the three-month period ended June 30, this will translate to bonus checks exceeding $14,000, U.S. Steel Media Relations Manager Amanda Malkowski said, according to the NWI Times. Bonuses are the “second highest of all time after the third quarter of last year,” she noted.
The union had negotiated profit-sharing back in 1986, with the idea being that workers would forgo wage raises when the company was in trouble, but share in the benefits when the firm raked in profits.
“Profit-sharing is an important part of our contract, but because the steel business is cyclical, sometimes it pays something and sometimes it pays nothing,” the United Steelworkers said in an update to members.
“That’s one reason we are focused on securing wage increases in bargaining because we need guaranteed wages to support our families and pay our bills.”
U.S. Steel’s bumper profit-sharing announcement comes as the company’s adjusted net earnings in the second quarter came in at a record $1.104 billion. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period also hit a record of $1.620 billion.
In a video message, U.S. Steel CEO David Burritt thanked employees for the company’s financial performance.
U.S. Steel Industry
According to Philip Bell, the president of the Steel Manufacturers Association, the industry registered record profits in 2021. Bell, when speaking to SteelOrbis in December 2021, predicted that investments in steel capacity in the country to total more than $16 billion between 2021 and 2023.
Back in 2018, then-President Donald Trump exercised authority under Section 232 of the Trade Expansion Act of 1962 to impose a 25 percent tariff on steel imports, a move that is said to have benefited domestic steel manufacturers.
In a brief issued on July 8, Nucor Corporation, one of the largest steelmakers in America, said that the U.S. steel industry was “in a state of crisis” after the Department of Commerce initiated the Section 232 investigation of steel imports in 2017.
The American steel industry was operating at a utilization rate of only 74 percent by 2017, as steel imports severely affected the domestic industry. The passage of Section 232 contributed to a “stable market environment” for domestic steel producers.
Between 2016 and 2021, U.S. steel production, for example, rose, from 86.5 to 95 million metric tons. In 2017, steel imports were at around 34.7 million metric tons, which fell to 28.6 million metric tons by 2021.
“After operating at a loss in five out of nine years leading up to the Section 232 response, the industry has returned to more stable profitability,” the brief said.