Weymouth Steel Corporation
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Weymouth Steel Corporation
In early September of 1990, Weymouth Steel Corporation found itself with both good news
and bad news to communicate to its salaried employees. The good news would affect all salaried
employees, the bad news only some. When Chairman of the Board Carl Weymouth and his staff
discussed the matter, they realized that they faced a familiar but difficult task in corporate
communication-a task, moreover, that seemed to encourage reappraisal of some of Weymouths
traditional approaches to employee communication.
GOOD NEWS AND BAN NEWS
The good news was that nearly all salaried employees would be receiving salary increases
and improved benefits. Provisions for retirement, vacations, medical and dental care, lift insurance, and stock ownership were liberalized or improved in variety of ways. While some of the changes
derived from provisions of the most recent union contract, others resulted from Weymouths
on-going adjustment of salaries and benefits. Ordinarily, such changes were communicated to
employees through personnel bulletins and regular issues of the appropriate Weymouth
publications-Metal News for salaried employees, The Open Hearth for hourly employees.
The bad news was that the company anticipated that it would have to terminate a sizable
number of its employees-salaried as well as hourly. Long recognized as a highly cyclical business,
the steel industry was enduring a long-term slump due largely to stiff competition from overseas
companies. In the next eighteen months, Weymouths business was likely to fall off 25%. At the
same time, a variety of forces intensified the companys need for capital. To be come more
competitive with European and Japanese firms, Weymouth needed to purchase and install new
processing machines and to construct state-of-the art rolling and hot-strip mills.
In addition, their plants needed to satisfy increasingly stringent federal anti-pollution standard.
During the next five years, capital spending was expected to average $2 billion a year. Therefore,
all areas of the company urgently needed to reduce costs. In recent years, Weymouth has initiated several major cost-cutting measures.