China.com carried an article on the financial struggle that the Taiyuan Iron and Steel Group (TISCO) is going through. According to the article, TISCO is the largest and most advanced stainless steel manufacturer in the world. Its annual steel production volume exceeds 10 million tons, 40 percent of which is in stainless steel. However the company’s profits have been declining yearly since 2012. They dropped from 18 billion (US$2.8 billion) in 2011 to 10 billion (US$1.55 billion) in 2012; 5 billion (US$0.77 billion) in 2013; 4 billion (US$0.62 billion) in 2014; continuing to a negative 40 billion (US$6.19 billion) in 2015. Recently, the company had to shut down some equipment and production lines and significantly cut back workers’ hours. According to the article, TISCO employees were asked to work one month and take three months off. They were told that during the three months that they are off, they are required not to take on any other jobs and must remain on call in case of any last minute schedule changes. The workers had to take a 20 percent pay cut and some of the workers could only make 50 percent of their pay compared to what they made before. Other measures that the company took included shifting the direct workforce to an indirect role by taking back-end maintenance and support functions such as working in a nearby agriculture farm that the company built. At the same time, TISCO set up sales offices in Shanghai, Guangzhou, Hong Kong and the U.S. in order to expand its sales channels.
Source: China.com, March 20, 2016
http://finance.china.com.cn/industry/hotnews/20160320/3636545.shtml