15 November, 2010
On the evening of 7 November, U.S. Steel Corp. locked out 900 members of the United Steelworkers (USW) Local 1005 at the American company’s Hamilton, Ontario, steel mill. The reason given: the union’s refusal to submit a concession-laden contract to members for a vote.
In 2007, U.S. Steel bought Canadian steel producer Stelco Inc. and its two steel mills, the Hilton Works in Hamilton and Lake Erie Works in Nanticoke, Ontario, for US$1.1 billion. The 1985 Investment Canada Act contains a provision stating that foreign investment in Canadian enterprises must provide a “net benefit” to Canada.
Photo: Cathie Coward/Hamilton Spectator
The lockout eight days ago frames that flawed premise. In fact, beginning in August 2009 and continuing for eight months, 1,000 steelworkers at the Lake Erie Works were locked out while U.S. Steel extracted pension cuts and other concessions.
Now, in Hamilton, the situation is much the same. The American steelmaker is demanding closure of the defined benefit plan to new hires, an end to pension indexing for 9,000 Stelco retirees, cuts totalling 80% of the value of cost-of-living adjustments, and elimination of two weeks vacation time.
A provincial mediator delivered these social cuts to Local 1005’s bargaining committee on 4 November, three months after a prior collective agreement expired. With the union refusing to adhere to a company demand to put the proposal to a vote, U.S. Steel imposed the lockout. Local 1005 seeks status quo in a new labour agreement.
Photo: Cathie Coward/Hamilton Spectator
“These workers and their community were promised by their government and U.S. Steel that they would benefit from this foreign multinational’s takeover of Stelco,” stated USW Canadian National Director and ICEM Vice President Ken Neumann. “Instead, the takeover has resulted in pain and suffering for working families. U.S. Steel’s ‘net benefit’ has consisted of plant shutdowns, productions cuts, lost jobs, and labour disputes.”
Twice in the past two years, U.S. Steel has defied the Investment Canada Act. Only five weeks ago, on 8 October, the company shut Hamilton’s blast furnace and idled all steel-making, citing weak customer orders. Although no workers were made redundant then, the shutdown was the harbinger to the 7 November lockout.
From November 2008 to March 2009, a mere 15 months after buying Stelco, U.S. Steel laid off 1,500 of 2,000 workers at both operations as it moved production to steel mills in the US. The Canadian government is attempting to enforce the Investment Canada Act. It has brought a lawsuit in federal court against U.S. Steel for breaking job and production level promises with the 2008-2009 shutdowns.
USW Canadian National Director Ken Neumann
The government is seeking fines of up to C$10,000 per day for breaching the Act.
But in court arguments, still underway, U.S. Steel used the economic recession to justify curtailments in Canadian steel production. Adding to production flight – and yet another slap at the Canadian law – near parity between the Canadian dollar and US dollar now has made a shift in production economical for the company. Slab steel made in both Hamilton and Nanticoke has been destined southward for finishing, and the weak American dollar has now made raw steel production cheaper in the US.
Neumann has seen the Investment Canada Act trampled on too many times. “Whether it’s Vale in Sudbury and Labrador, or U.S. Steel in Hamilton and Nanticoke, foreign corporations show no qualms about breaking their commitments and inflicting economic pain,” he said.
Neumann, the USW, and all Canadian industrial unions seek a re-write to the Investment Canada Act, revisions that give genuine social and economic guarantees to workers in the wake of corporate takeovers.