Gallatin Steel Skills Development Initiative

1. Gallatin SteelSkills Development Initiative Society of Maintenance & Reliability Professionals Greater Cincinnati/Northern Kentucky Chapter July 19, 2013 Making America Stronger - That’s How We Roll

2. Overview • Flat Rolled Mini-Mill • Third CSP built in the United States • Construction Began in 1993,Operations Began in 1995 • 50/50 Partnership between ArcelorMittal and Gerdau • Absorbed original partners: Dofasco and Co-Steel • Plant Design Capacity (as built) of 1.2 million tpy • Demonstrated Production at 1.8 million tpy • Evaluated 3+ million tpy (Execute intended phase II) Making America Stronger - That’s How We Roll

3. Mission Making America Stronger, That’s How We Roll Making America Stronger - That’s How We Roll

4. Vision We will manufacture excellence and deliver confidence Our relationships will be the envy of all others We will have highly effective processes, efficiently executed, evaluated through internal and external feedback and innovatively improved We will drive our own success and have no fear of the future, only excitement in creating it We will have stable earnings performance throughout the business cycle through cost management, customer satisfaction and diversification backstopped by good cash management Making America Stronger - That’s How We Roll

5. Core Values Safety We work together with a shared attitude of vulnerability and vigilance, knowing our lives depend on it We hold each other accountable so every job is done the right way, the safe way, every time Integrity We conduct ourselves with integrity in everything we do We respectfully say what needs to be said and listen to what needs to be heard in the spirit of growth and improvement Stewardship We protect and enhance our community and environment knowing all future stakeholders will feel the impact of the choices we make today We hold our values, relationships, assets and image in trust for those depending on us to create a better future Partnerships We develop and maintain collaborative relationships to pursue the goal of long-term mutual success for all Accountability We take shared ownership of problems and opportunities, looking first for solutions within ourselves Continuous Improvement We become better than we were yesterday, seizing opportunities and embracing challenges to improve Making America Stronger - That’s How We Roll

6. Gallatin Steel Strategy Map Revenue Profitability Long-Term Shareholder Value Through Stable Earnings F2: Optimal volume through customer/product market driven diversification F4: Prudent management of financial resources Financial Perspective F1: Increase customer value F3: Diligent cost management Making America Stronger—That’s How We Roll Customer Proposition C1: In partnerships, create tailored solutions for mutual long-term success C2: Ease of doing business OTD, Quality, Flexibility, Information/Communication Relationships Relationships Resources Excellence Internal Processes IP5: Produce consistent quality driven by customer needs IP1: Build relationships, build customer value IP3: Ensure adequate critical resources (SCM) IP4: Identify and implement technology that advances our capabilities in alignment with business direction IP6: Continually improve our processes IP2: Create marketing capability to drive business direction IP7: Improve equipment reliability, efficiency and effectiveness PC2: Have engaged leaders who communicate and inspire PC3: Manage performance in line with business strategy PC4: Nurture talent for long-term success People & Culture PC1: Have a culture driven by our core values Safety Integrity Stewardship Partnerships Accountability Continuous improvement

7. Workplace Demographics Making America Stronger - That’s How We Roll

8. Problem Statement • Simplistic Progression Path for Maintenance • Pass 2 Tests > Top of the Scale • Theoretical, not Practical • Inadequate Training Roadmap • Knowledge Transfer • Need to Acquire New Talent • Knowledge Transfer Making America Stronger - That’s How We Roll

9. Vision of New System The vision for a new system includes the following criteria. • People will be highly trained • People will be highly qualified in their jobs • Each person can advance in skills based on his own initiative • Each person will be held accountable for tracking his own progress

10. Components of New System • There will be 5 levels in the maintenance system. Basic Specialist Senior Expert Project Leader • Combination of Efforts to Progress to Next Level • Training • Documented Proficiency • Time • Leadership Making America Stronger - That’s How We Roll

11. Training • Web Based Training • External Programs: • DuPont (Soft Skills, Generic Skills) • Internal Programs: • Moodle (Gallatin Specific Knowledge) • Traditional On-site Class Room Training • Wide Applicability to Associates • Partnerships with Local Trade Schools • Foundational Skills • Department Level Hands On Training • Mockups

12. Transition Plan • Expected to take 2 years and 10 months - Started March 1, 2013 - Wages will be grandfathered through January 1, 2016 - If a person qualifies at a higher rate early, he will get that rate • Document prior achievement of requirements • Avoid bureaucracy

13. Lessons Learned • You can’t communicate enough • Tiered communication efforts required • Emotional change management probably more important than technical issues • “Stages of grief” • Difficult to over-estimate effort to develop training program • Be prepared to keep up when acceptance of new program kicks in Making America Stronger - That’s How We Roll