The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Naomi Powell published in the July
26, 2005 edition
By Naomi
Powell
The Hamilton Spectator
JARVIS (Jul 26, 2005)
Lake Erie steelworkers have voted to
strike in a bid to force Stelco to sweeten its bailout of the debt-ridden
pension plan.
The move puts the 1,000 workers on a
collision course with the steelmaker. A strike could derail attempts to
restructure the company. And that might cost workers their jobs if it forces
Stelco into bankruptcy after nearly 18 months of protection.
"They're wielding a heavy hammer
and nobody's taken it away from them yet," said Bruce Leonard, president of
the Insolvency Institute of Canada.
The majority of Nanticoke's
steelworkers attended the strike meeting in two shifts at the Jarvis community
centre last night. They voted 98 per cent to authorize union leaders to
"take action" on their labour contract, which expired last summer.
"This is clearly a strike
vote," said Ken Neumann, national director of the United Steelworkers.
"Our patience is truly running out and if that's what it takes, that's
what we'll do."
Union leader Bill Ferguson would not
say if there are any immediate plans to take Lake Erie's workers out.
But he said he'd be in touch with the
company over the next few days.
Stelco's Lake Erie workers have been
without a contract since last summer. The threat of a strike has been their
union's most powerful bargaining tool. And they're using local talks to
influence Stelco's restructuring.
The chief issue there is pensions.
Stelco owes the fund $1.3 billion. The restructuring plan it unveiled two weeks
ago would repay that over 10 years with a $200-million downpayment.
The United Steelworkers of America have
rejected that proposal. Workers at plants in Hamilton, Nanticoke, Burlington
and Alberta back a plan by Tricap Management to pump $500 million into the
shortfall and repay it over six years.
Newsman said that's the standard Stelco
must meet.
Lake Erie has been the steel giant's
most consistent profit maker for the past 10 years, often buoying other
struggling divisions.
"I think they are just trying to
increase their leverage so that they can say they mean business," said
Richard McLaren, a University of Western Ontario professor who specializes in
corporate insolvency issues. "If they did strike however, the whole
process of restructuring would become much more tenuous."
With its most profitable division on
strike, the company could have trouble raising the money it needs to pay off
its debts and refinance its operations, McLaren said. A strike could also
jeopardize the company's relationships with some of its most important clients
like DaimlerChrysler and Ford, even though the union has an agreement with
customers to provide 90 days notice of a strike.
"(A strike) would obviously cause
a legitimate concern for our suppliers, customers and others," Stelco
president and CEO Courtney Pratt said last night. "And it could cause
serious damage to the company's restructuring."
The Hamilton division of Stelwire, a
Stelco subsidiary, will also see its contract expire at the beginning of
August. Scott Duvall, president of that local, said he'll decide next week when
to hold a strike vote. The 3,000 workers at Stelco's Hamilton Hilton works have
not taken part in the restructuring process and have a contract through next
summer.
Stelco's management and bondholders
have shunned the Tricap proposal, saying it unfairly favours the workers at the
expense of other stakeholders.
The union has filed a motion asking
Justice James Farley to force the company to consider the plan. That's a
privilege usually reserved for the company, court monitor and creditors. Farley
will consider that on Aug. 16. The union has not yet said if it will pursue the
highly unusual route of seeking creditor status with the court, but if it did
it would automatically qualify them to submit a plan.
The last time Stelco's Lake Erie plant
went on strike was following a round of failed labour negotiations in 1990.
"That was hard, it was hard on
families," said Tom Armstrong, who has worked at the Lake Erie plant for
23 years. "But if push comes to shove, everyone's ready to go out
again."
After nearly 18 months of uncertainty,
Armstrong said Lake Erie workers are losing their patience with the
restructuring process.
"You live your life one day at a
time and you never know what will happen next," he said. "This
company has put all of out lives on hold."
npowell@thespec.com
905-526-4620