NEW YORK U.S. Steel Corp. is stepping up its efforts to reduce costs in a number of key areas, including raw materials, logistics, and repair and maintenance, in what it has characterized as a tough market environment.
"(U)nder the leadership of Mario Longhi, our chief operating officer, we are forming a series of cross-functional teams throughout the organization to increase our focus on a number of critical cost areas where we spent a very substantial amount of money," chairman and chief executive officer John P. Surma said during the steelmakers earnings conference call.
While not giving a particular target, Surma noted that the companys spending in those areas was in the "billions of dollars annually" and that "a small percentage or reduction would be very meaningful to our results."
The push for savings comes as steel prices could come under further pressure due to falling raw material costs. "We need to make sure we drive our break-even point down further than it is today and thats what our objective is," Surma said in response to an analysts question about U.S. Steels ability to stay profitable in a falling scrap and steel price environment.