By Naomi Powell
The Hamilton Spectator
(Jun 8, 2006)
Stelco's largest group of unionized workers is seeking
higher wages and pension benefits for pensioners from the same management team
that has identified cost cutting as its top priority.
Stelco is negotiating a new contract with Local 1005 of the
United Steelworkers union at the company's Hamilton Steel operations, where
labour-management relations have a long, troubled history.
Local 1005's current contract expires July 31.
The proposals come only weeks after Stelco CEO Rodney Mott
told industry analysts that cuts to benefits and the number of employees were
at the heart of his strategy to make the steelmaker profitable again.
"The main things we'll be looking at ... are overall
staffing and benefits programs, our use of contractors and relationships with
suppliers," Mott told analysts in May. "This is the typical stuff
you'd do during a restructuring. We don't have any details, just a lot of areas
under review."
The union bids for increased wages and pension benefits for
existing pensioners were included in a contract proposal outline distributed at
a recent membership meeting. Other proposals include improved dental and vision
care, elimination of a $70,000 cap on lifetime health care, and an increase in
the wage differences between job classes.
Stelco has already
upset salaried employees and retirees by announcing plans to cut benefits by
reducing vacations, changing the drug plan and forcing employees to pick up
part of the cost of dental visits.
Any attempt to cut benefits for the unionized workers will
face serious opposition as the company struggles to restructure after two years
in bankruptcy protection.
"A strike would be disastrous for Stelco right
now," said Anil Verma, a professor at the University of Toronto
specializing in labour relations. "Buyers can all go somewhere else. The
customers can all flee at a moment's notice."
The union outline notes that Stelco experienced record
losses as well as record profits during two years under the Companies
Creditors' Arrangement Act. Rolf Gerstenberger, president of Local 1005, has
maintained the CCAA process was a thinly veiled attempt by the company to gain
concessions from the workers.
"The company's come back from bankruptcy and the steel
prices are up, so the union will be saying 'Give us more,'" Verma said.
"The company will be looking at how they can catch up with the costs and
productivity of the competition, on which scale they are behind."
Analysts have predicted steel prices will climb at least 9
per cent -- to about $600 US per tonne -- in the third quarter.
Meanwhile, the group
representing Stelco's salaried pensioners is awaiting a response to its request
for a meeting with Mott to discuss cuts to their benefits. "When we
retired, it was with the understanding that our health and welfare benefits
would continue, without reduction, for the rest of our lives," Gary
Dallin, chair of the Stel-Salaried Pensioners Organization, said in a letter to
Mott. "It is our belief that, with the provincial loan agreement, Stelco
has the means to achieve its stated goal of returning the company to
profitability without reducing the health and welfare benefits provided to
salaried pensioners."
Stelco emerged from bankruptcy protection partly in thanks
to a $150-million loan contribution to the company's mammoth $1.3-billion
pension deficit. Neither Stelco nor Gerstenberger would comment on the
negotiations.
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