Ispat-Sidbec : Entering North America
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The Turnaround
Ispat left the top management in place at
Sidbec-Dosco. “I realized that a drastic change in management would not give the desired result. The team there was quite capable of handling the issues." Ispat’s only change was to appoint a new vice president of finance, who had been at Imexsa. A middle manager from Ispat’s Carribean plant who had requested a transfer, was also brought to Sidbec. Sidbec’s USWA members were at first skeptical of Ispat’s intentions because of the acrimony over the Bethlehem contract talks. But Ispat quickly dispelled any misgivings the union had by announcing plans to restart Sidbec’s idled Module 1 DRI plant. Constructed in 1973, the 400,000-ton/year module had been shut down in the late 1980s. Since then, Sidbec had been running only the other Midrex module, which had a capacity of 600,000 tons/year. |
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Although managers at Sidbec had explored the possibility of restarting
Module 1 before Ispat came in, the decision was pushed by the new
owners. Sensing that the price of scrap would go up and remain high,
Mittal started the smaller DRI module immediately. Within two weeks of
closing the sale, Ispat approved an investment of C$16 million to start
up Module 1. Module 1 restarted on March 31, 1995. The new jobs created
at the DRI plant were the first ones Sidbec had created in many years.
Like others in the continent, the company had been downsizing till then.
The investment helped Sidbec-Dosco (Ispat) get off on the right foot.
The shift from government ownership changed the company’s culture as
well. Leboutillier recalled.
"Under government ownership it was always difficult to get people to realize and accept that the only way for them to have jobs in the long term is for the company to make money. There was a feeling that at the end of the day, if there is no more money, the government would step in and fill any financial void.”
Employees began to understand the importance of profits. The new attitude and culture were evident from the greater participation and commitment on the part of employees. Labor/management relations also improved. Leboutillier and the other administrators emphasized openness in dealing. A long time employee noted, “ Before, with the government, it was always difficult to see where they were going. When Ispat took over, they [invested] in the company and things got better" Under government ownership, managers often asked for concessions from the union. It was not so after Ispat took over. The union’s contract at Sidbec’s Contrecoeur and Longueuil mills expired in January 1997. Mittal gave the senior management complete autonomy, but liked to know what was going on. Leboutillier filed a weekly report that included information on production, costs, the market situation, a move by a competitor, or anything else that was relevant. He also sent a daily status report with key production and cost figures. Mittal visited the plant each quarter to review the results and to discuss the business plan for the next quarter.
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