U.S. Steel said it is planning an enhanced operating model and organizational structure to cut costs, and its CFO will resign.
The company’s new operating model is scheduled to start in 2020. The company hopes to save $200 million of annual fixed costs by 2022.
“These initiatives reduce costs and more closely align U.S. Steel’s corporate structure with the company’s previously announced strategic investments in leading technology and advanced manufacturing, including the recently announced purchase of a minority interest in Big River Steel … with a clear path to consolidation,” according to the company’s statement.
The announcement comes after the company said it would take a 49.9% stake in its lower-cost rival Big River earlier this month. The cash transaction of $700 million gives U.S. Steel access to Big River’s processes for producing sheet steel from melting scrap in an electric furnace. U.S. Steel has an option to acquire the remaining 50.1% within four years.U.S. Steel is also realigning its leadership team around more “nimble and efficient executive functions” to allow the company to establish a more competitive cost structure and increase profitability.
Kevin Bradley, the industrial group’s chief financial officer, is resigning and will remain with the company as executive vice president and adviser to the chief executive officer through the end of 2019. Bradley will also support the transition to his internal successor, Christine Breves. Breves, currently senior vice president, manufacturing support, and chief supply chain officer, will become finance chief starting Nov. 4.
Breves joined U. S. Steel in 2013 to oversee the execution of the company’s global procurement and sourcing strategy. Since then, Breves has assumed responsibility for the company’s logistics services organization; Transtar, U. S. Steel’s short-line railroad subsidiary; sales and operations planning; information technology; commercial support; engineering; and corporate quality.
“Kevin has served U. S. Steel well as CFO, contributing to the transformation of the company, including last week’s announcement of our investment in Big River Steel,” said David Burritt, president and chief executive officer. “I have appreciated Kevin’s dedication to the company and thank him for his key contributions to help create a stronger, more successful future for U.S. Steel.”