ArcelorMittal embraces cost-cutting to 'navigate' eco crisis

In its bid to tame the economic crisis which has resulted in consecutive quarterly losses, ArcelorMittal will continue with measures like production and job cuts, besides trimming salaries of its brass, as it aims to save $2 billion in its cost-cutting drive for 2009.      

"We are operating in a very challenging environment," ArcelorMittal Chairman and CEO L N Mittal said pointing out at the unprecedented production cuts of up to 50% in the past few months to help reduce inventories.      

The steel firm envisages trimming its workforce by over 9,000 through voluntary redundancies and cutting salaries of senior management by up to 15% by its consent.      

The company said it has identified $2 billion of sustainable selling, general and administrative expenses (SG&A) and fixed cost reductions besides capital expenditure reduction for this fiscal.      

Industrial optimisation measures implemented resulted in annualised reduction of more than $6 billion in temporary fixed cost for Q1 2009, and is expected to increase to more than $7.5 billion in Q2 of 2009, the company said.      

"Our intensified industrial and financial plan demonstrates our commitment to take necessary action and to navigate the crisis as well as enable ArcelorMittal maintain its leadership in the global steel industry," the firm's CFO Aditya Mittal said.