Stelco Inc. to Reduce Dividend and Salaries, Cut Capital Spending
TORONTO -- Stelco Inc. said it will slash its quarterly dividend in half, cut salaries and reduce spending on capital projects as a result of the recession in its steel markets and the effects of a seven-week strike by the United Steelworkers of America.</br></br>The Toronto steel manufacturer said it will cut its regular quarterly dividend payment to 12.5 Canadian cents (U.S. 10.8 cents) a share from 25 Canadian cents a share, the first such cut in nine years. The last time it cut its dividend, Stelco was also in the midst of a lengthy steelworkers' strike.</br></br>Company officials said that the decision to cut the dividend, payable Nov. 1, could save Stelco about C$4.4 million (US$3.8 million). They declined to estimate savings from cutting salaries and capital spending.</br></br>The company had planned to spend C$185 million on capital projects during 1990, a significant portion of which was accounted for by a project to reline one of its blast furnaces. That reline, begun July 1, has been halted by the strike, Stelco said.</br></br>A spokesman for Stelco said salaries will be cut "progressively" as long as the strike continues. He declined to identify the size of the initial reductions.