US Steel to Pay Record Profit-Sharing Bonuses on Record Earnings

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
August 1, 2022Updated: August 2, 2022

U.S. Steel employees will receive a record second-quarter amount in profit-sharing as the company reported a strong performance for the period.

According to the company’s contract with the United Steelworkers union, steelworkers will receive $30.72 per qualifying hour in profit-sharing bonuses. That translates to bonus checks exceeding $14,000 for the three-month period ended June 30, U.S. Steel spokesperson Amanda Malkowski said, according to The Times of Northwest Indiana.

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 profit-sharing announcement comes as the company’s second-quarter adjusted net earnings in came in at a record $1.104 billion. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period rose to a record of $1.620 billion.

In a video message, U.S. Steel CEO David Burritt thanked employees for the company’s financial performance.

US Steel Industry

The industry registered record profits in 2021, according to Philip Bell, the president of the Steel Manufacturers Association. When speaking to SteelOrbis in December 2021, Bell predicted that investments in steel capacity in the country would total more than $16 billion between 2021 and 2023.

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 Corp., one of the largest U.S. steelmakers, said the nation’s steel industry was “in a state of crisis” when the Department of Commerce initiated the Section 232 investigation of steel imports in 2017.

The U.S. steel industry was operating at a utilization rate of only 74 percent by 2017, as 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, to 95 million metric tons from 86.5 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.