For UC RUSAL, one simple act is crucial to reducing costs.
Bonuses for managers at the world’s largest aluminium company
depend on the company’s 75,000 workers heeding the message.
“We have to introduce a new culture: if you leave the
office, turn off the lights,” Artyom Volynets, UC RUSAL’s deputy
chief executive for strategy, said at Reuters Global Mining and
Steel Summit on Monday.
“We have 16 smelters, each with their own headquarters and
offices. We employ 75,000 people. If each one of them is
switching off the lights at the end of their shift, that would
help tremendously.”
UC RUSAL embarked on a major drive to slash production costs
last year as part of an ultimately successful attempt to secure
Russia’s largest ever private sector debt restructuring.
Easy access to Siberian hydroelectric power, compared with
relatively high-cost coal used to power smelters in other parts
of the world, affords UC RUSAL a distinct cost advantage when
making aluminium used in transport, construction and packaging.
In the first half of 2009, it cost UC RUSAL an average
$1,400 to produce a tonne of aluminium. The metal is now selling
at above $2,200 a tonne.
UC RUSAL has cut costs by sourcing cheaper raw materials of
better quality and improving throughput rates at its smelters in
Siberia, which account for about 80 percent of its total output.
But cheap power in Siberia had also led to complacency.
“Our smelters are located in probably the only remaining
major energy-long region in the world. Therefore, if you buy
power at 2 cents per kilowatt, you don’t really care how much
you spend,” Volynets said.
“For my colleagues on the operational side of the business,
their key performance indicators are 100 percent tied to cost
improvements,” he said. “They will not be compensated if these
improvements are not implemented.”
But arguments for a lighter sentence based on medical problems are not accepted easily.” can and sometimes do take a defendant’s health and medical needs into account in sentencing,” said Stephanos Bibas, a professor at the University of Pennsylvania Law School. “But it’s also true that defendants know about this leniency and attempt to qualify for it causing judges to view some claims with a skeptical eye.”In the biggest insider trading case in decades, Galleon Group hedge fund founder Rajaratnam was convicted in May on all 14 counts of conspiracy and securities fraud. U.S. District Judge Richard Holwell is scheduled to sentence him on Thursday.Federal prosecutors, who have labeled him “arguably the most egregious violator” of insider trading to be caught, are seeking a sentence of up to 24-1/2 years.Rajaratnam’s lawyers, led by John Dowd of Akin Gump Strauss Hauer & Feld, have made his failing health a central theme in their plea for leniency.Throughout his trial, the 54-year-old Rajaratnam did not show any visible signs of medical problems aside from a protective boot that he wore on his right foot due to a bacterial infection.Still, Rajaratnam’s lawyers have asked for a sentence “substantially below” what is called for under the federal guidelines, arguing that a long stretch in prison would amount to a “death sentence.”“The evidence before the Court can leave no doubt: Mr. Rajaratnam is not a healthy man, and his death will be hastened by a term of imprisonment,” wrote lawyers for Rajaratnam in a sentencing memo in August.Some of the most prominent white-collar defendants sentenced by judges in the same district as the Rajaratnam case have failed to persuade judges that their health issues merited a lighter sentence than they would have otherwise received.Former WorldCom Chief Executive Officer Bernard Ebbers, who was convicted in 2005 for his role in an accounting fraud that sent the company into bankruptcy, raised his heart trouble in advance of his sentencing. U.S. District Judge Barbara Jones sentenced him to 25 years, not quite the life sentence that the government had sought. Jones said that Ebbers, 63 years old at the time, could receive treatment for his heart in prison, according to news reports.After pleading guilty to orchestrating the largest Ponzi scheme in history, Bernard Madoff’s lawyer raised his health in a plea for leniency. But in 2009, U.S. District Judge Denny Chin, now on the U.S. 2nd Circuit Court of Appeals, sentenced Madoff to 150 years in prison, one of the longest sentence handed down to a white-collar defendant. Since being behind bars, Madoff has spent a brief stint in a prison hospital for hypertension, according to report in the New York Daily News.The health and age of John Rigas, one of the founders of Adelphia Communications Corp, was not disregarded when he was sentenced in 2005 for his role in an accounting fraud. Rigas suffered from heart problems and bladder cancer, according to news reports. But his condition only helped around the margins. Instead of the nearly 18 years prosecutors had sought, U.S. District Judge Leonard Sand sentenced then 80-year-old Rigas to 15 years.SENTENCING GUIDELINESIn the 2005 decision, United States v Booker, the U.S. Supreme Court ruled that district judges are not bound by the federal guidelines, which provide formulas for calculating sentences.Now the judges are only required to consider the guidelines along with other factors. Among those other factors they can consider is a person’s physical condition.But in order to justify a more lenient sentence than the guidelines suggest, the defendant’s condition has to be so extraordinary that facilities offered by the Federal Bureau of Prisons cannot provide sufficient care for the individual, said Frank Bowman III, a professor at the University of Missouri School of Law. That makes the bar too high for many defendants.”The fact that you’re sick doesn’t distinguish you from a lot of people who are in prison,” said Bowman.As the prison population has exploded so have health care costs for inmates. In the fiscal year 2009, the Bureau of Prisons committed about $865 million for inmate health care, more than double the amount in 2000.Rajaratnam has not publicly revealed the details of his medical condition, arguing that it is a private matter. At pretrial hearing, lawyers for Rajaratnam said that he has diabetes, according to a report in The New York Times. A spokeswoman for Rajaratnam’s legal team declined to comment. Prosecutors have argued that Rajaratnam’s condition should be made public if he is going to rely on it for a reduced sentence.In 2008, the U.S. 2nd Circuit Court of Appeals vacated a sentence that departed below the guidelines in part because of the defendant’s heart condition. After a detailed review of the medical evidence, the appeals court found that sentencing judge had overstated the seriousness of the defendant’s condition.The court also found that there was no evidence that the Bureau of Prisons would not be able to provide adequate care for the defendant.Rajaratnam’s lawyers are hoping they can overcome that kind of scrutiny.”The Bureau of Prisons will simply not be able to manage these issues and provide the care that Mr. Rajaratnam requires,” they wrote in the brief filed in August. “Any significant term of incarceration would seriously threaten his well-being and be life-threatening.”The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.
The Democratic president was in Pittsburgh as part of a campaign to get lawmakers to pass his $447 billion proposal.It is the latest stop in a tour of swing states in advance of next year’s election to raise pressure on Republicans resisting big chunks of the jobs bill.”If they don’t pass the whole package we’re going to break it up into constituent parts,” Obama told a meeting of his Jobs Council.Obama was scheduled later to deliver remarks on the economy and the importance of passing the job plan.Republicans say Obama’s visit to a swing state like Pennsylvania was more about campaigning to keep his own job in next year’s election than fighting for American workers who are struggling with unemployment stuck above 9 percent since May.Obama’s council of top U.S. bosses, under the chairmanship of GE chief executive Jeffrey Immelt, delivered a report in which they proposed steps to foster U.S. innovation and make the country more attractive to foreign investment.But many of the report’s recommendations would require support from Republicans to become law — a potentially tall order in a divided Congress in which Republicans control the House of Representatives and Democrats hold the Senate.”There are certain ideas that are contained in this Jobs Council report that historically have received bipartisan support … We can’t wait for another election to start moving forward on these ideas,” Obama said.Obama’s 2012 re-election chances depend heavily on his ability to spur the sluggish economic recovery and revive a nearly stagnant job market.The president launched the jobs bill last month to persuade Americans that he had a plan to get them back to work.But the bill was headed for likely defeat in the Senate as his Democrats were expected to fall short of the 60 votes needed to clear a procedural hurdle.White House National Economic Council Director Gene Sperling said the Senate vote later on Tuesday would highlight how the Republicans were being obstructionist despite a public weary of high unemployment.However, he made clear the Obama administration’s fallback option would be to offer the jobs plan piecemeal.”If they (Republicans) choose not to give the support that will allow this to get 60 votes, if they choose to do that, then we’ll come back piece after piece,” he told CNBC news.Several Democrats and nearly every Republican are expected to vote against the bill 6 p.m. EDT/ (2200 GMT).Lawmakers could choose to pass pieces of the bill. A payroll tax cut is due to expire at the end of this year, and would impose an effective tax increase at a time wages have not been rising much at all. Obama’s bill would extend the tax cut and also extend unemployment benefits for long-term unemployed.Republicans said they had recommended breaking the proposal into smaller parts last month in a memo identifying areas where the two parties could find common ground.”The president and Senate Democratic leaders want to pretend that they are battling Republican intransigence, but — in fact — we are 100 percent focused on doing everything possible to help get our economy moving again,” said Michael Steele, spokesman for Republican House Speaker John Boehner.Despite a month of high-profile lobbying by the president, the bill could fail to get even a simple 50-vote majority in the chamber. Such an outcome would be an embarrassing setback for Obama’s top legislative priority.Republicans who control the House already have said they will not bring the full bill up for a vote.
