EUROPEAN STEEL COMPANIES–UNIVERSITIES JOINT CONFERENCE

1. Restructuring of employment and recruitment needs of Arcelor Mittal Steel Poland Andrzej Wypych EUROPEAN STEEL COMPANIES–UNIVERSITIESJOINT CONFERENCE Warsaw 26-27 April 2007

2. My (and not only) private life’s philosophy " Those who don't want- look for a reason,   Those who want - look for a way.„ (a gift from Grzegorz Turniak)

3. Agenda • Restructuring of company Arcelor Mittal Poland – conditions and social aspects in the context of recruitment needs. • Recruitment needs ofArcelor Mittal Poland and main actions aimed at satisfying those needs.

4. Restructuring      KEY: Headquarters Huta CEDLER Huta FLORIAN Huta KATOWICE Huta im. T.SENDZIMIRA Basic information

5. Restructuring 1. Employment restructuring in the years 1999 – 2006 - summary * Incorporation of maintenance services took place on June 1, 2006 - 966 employees 18 734 1 304 2 097 35 164 16 430 15 126 13 029 5.03.2004 PHS S.A. privatization 1.01.1999 1.01.2002 creation of PHS S.A. 1.01.2007

6. Restructuring 1. Employment structure 1976 1954 1902 1828 Date of start-up :

7. Restructuring 1. Employment structure „Pareto 63-29-8%” 

8. Restructuring 1. Employment structure

9. Restructuring 1. Employment structure

10. Restructuring 1. Employment structure

11. Restructuring 2. • Factors determining the restructuring process in MSP: time social stability (the so-called social acceptance) ■ quantitative • Aspects of the restructuring ■ qualitative ■ social • Restructuring in the context of EU requirements - 10411 (Company’s Business plan, Privatization Agreement, Protocol no.8 (‘Competition’) to the Accession Treaty), ‘the Pareto principle  structure 63%-29%-8%’ • McKinsey project in MSP vs. the number of 10411

12. Restructuring 3. Characteristic features of the restructuring process in MSP • Forced restructuring – trade unions resistance • Time shortage – not enough time for implementation in view of the conflicts existing in the background, both in the company and in the country • Lack of legal support on the part of the Polish government as regards mass lay-offs • So far the restructuring has been to a small extent followed by changes in the organizational structure, workload optimization has been too slow, no newmethods of work organization nor new management methods have been implemented.

13. Restructuring 4. • Causes of the so-called age gap „successors- fear” syndrome creation of big organizational units creation of small organizational units (taking over employees from large companies by offering higher salaries to them) • Instruments used in scope of employment restructuring and reduction: • Shield Program • Voluntary Retirement Scheme • Vocational Activation Scheme • Employee Retirement Scheme • Departure as a result of withdrawing from the Social Package (for reason on the part of the employer)

14. Recruitment needs 1. Situation in MSP • Lack of adequate databases with information on the existing human resources for planning purposes – works aimed at creating such a database are in progress. • Lack of adequate recruitment policy for MSP – a project aimed at long-term recruitment of employees for MSP needs is in progress • 1998 recruitment – 198 persons (including 35 with higher education) 1999-2006 recruitment – 40 persons (including 16 with higher education)

15. Recruitment needs 1. Number of employees who will become entitled to retirement pension in the years 2007 -2020. Influence of manpower optimization

16. Recruitment needs 1. Employees’ age in individual Company Units. • Average age in the Company: • 45 years and 11 months. • Average age at the following positions: • U (white-collar) – 47 years and 3 months • F (blue-collar) – 45 years and 6 months

17. Recruitment needs 2. • Internal training and educational resources – brief information HK (Katowice)– previously – Vocational school functioning by Huta Bankowa currently - none HC (Cedler) – Vocational school, apprenticeship in ZHC currently - none HF (Florian) – Vocational school functioning by HF currently – none HS (Krakow) – Vocational school functioning by HTS currently – exists in a slightly changed form Conclusion: It is necessary to take adequate steps in order to find new forms of ensuring blue-collar employees

18. Recruitment needs 3. • External training and educational resources (main centers) • For the purposes of technology and production (63%) vocational secondary schools and vocational schools, (Silesian Secondary School of Science and Technology) Silesian University of Technology, Częstochowa University of Technology AGH • For the purposes of auxiliary services (29%) vocational secondary schools and vocational schools, (Silesian Secondary School of Science and Technology) Silesian University of Technology, Częstochowa University of Technology AGH University of Science and Technology University of Economics in Katowice, University of Economics in Kraków • For administrative purposes (8%) University of Silesia University of Economics in Katowice, University of Economics in Kraków National Louis University in Nowy Sącz Please note: There has been a dramatic change in educational trends, it also concerns higher education institutions,

19. Recruitment needs 4. General issues • Tasks related to the recruitment system are the responsibility of both HR services and line management • Employment policy targets: population replacement (closing the so-called age gap) qualitative replacement (related to new investments and technological changes) • Demographic and employment situation is similar in every country (for example Ireland, Germany, France); typical labor-related migration for instance from African countries is useless due to language and educational (professional) barrier. • Influence of demographic depression in Poland on a number of schools graduates.

20. Recruitment needs 5. Issues to be dealt with by the employer • Taking advantage of the potential of retired employees or those who are past the retirement age (creating a relevant database). • Extending internal opportunities in scope of vocational training (for example the so-called vestibule schools). • Employees’ multifuctionality – an element supporting the process of creating the succession system and smooth responding to employee needs. • Issue of adequate motivation and motivating employees to accept employment offers made by MSP

21. Recruitment needs 6. Issues to be dealt with by training and educational institutions • Higher education institutions and schools do not only provide future employees but they also support the process of identifying the needs of companies • Changes as regards higher education institutions related to business attitude to education and the management of higher education institutions – grounds for the existence of specialist departments within one country. Perhaps international cooperation should be suggested? Changes based on the example of Silesian University of Technology and University of Science and Technology • Existence of R&D centers – guarantee of keeping and winning employees, as well as financial support for higher education institutions.

22. How to improve recruitment ? ‘Those who don't want - look for a reason, Those who want - look for a way.’ Thank you for your attention