With an extra $4,000 or so in their pockets and snow in the mountains, Geneva Steel employees might think that Christmas has come early this year.
It has in a sense, even though there are still 101 shopping days until the holiday. Employees at the steel plant received an extra paycheck Wednesday as part of the company's profit-sharing program.Geneva Steel paid more than $10 million to employees, which averages out to about $4,000 to each employee depending on the hours worked and deductions, said Carl Ramnitz, vice president of human resources.
"Some are making more, but not many are making less," he said. "This is more of a sharing-savings program for employees. We are hoping they will take the money and put it in savings and use it to take some valleys out of the cyclical situation they may be in."
The profit-sharing program is designed so that union employees share in the profits of the company. The labor contract specifies that employees will receive 10 percent of the company's pretax profits.
Geneva Steel President Joe Cannon said employees will get a lot more than 10 percent of the actual profits. "This doesn't mean we have made $100 million or anything like that. It's a complicated formula with some deductions factored into it."
He said, "We are happy to do it. This is the most cyclical of all the industries. We have good years and bad years and this way we share all the way through."
Before Basic Manufacturing and Technologies of Utah Inc. - headed by Joe Cannon and his brother, Chris - purchased Geneva Steel last year, USX had an incentive program in place of the profit-sharing program.
The incentive program was an addition to the employees' pay based on productivity indicators. Extra pay was added to their standard hourly wage every pay period.
Ramnitz said the program was changed because it was hard to track the 62 separate incentive programs in the plant. Different areas in the plant were also competing with each other.
"Under the new labor agreement for this company, we changed the individual-type approach to a teamwork approach," he said. "This way they share with us in both the good and bad times. It makes everybody part of the Geneva team."
Ramnitz said the company planned to give profit-sharing benefits to those employees who had at least one year of service at the plant, basically those who made it through the takeover.
Last year at Christmastime those employees received a $500 advance on their profit-sharing to help them during the holidays because they had been out of work for 13 months.
This year, Geneva Steel officials elected to include not only the longtime employees, but all 2,200 employees in the profit-sharing program because "the company recognized that the new people played an integral part in making the company successful," he said.
Cannon said, "The reason we've been able to take advantage of the market is because of the work force. The employees have a real strong commitment."
Ramnitz hopes the profit-sharing program will help employees now that the steel market is returning to its traditional level.
"This has been a very unusual year from the market standpoint," he said. "This is probably the strongest market I've ever seen. We were fortunate to hit it at the right time, but now we are seeing a return to the traditional market. That's why we hope employees will save their money."
As far as the economy in the county and state goes, Ramnitz said the extra $10 million "will definitely have a very positive effect."
The profit-sharing program is part of a two-year labor contract between the company and union employees. Pay from the program comes after the fiscal year, which runs from Sept. 1 to Aug. 1.