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 June
17, 2006 edition
By Naomi Powell
The Hamilton Spectator
(Jun 17, 2006)
Stelco is making another round of cuts to benefits for
salaried workers and retirees, this time targeting health and dental coverage
and pension eligibility.
The latest reductions follow on cuts announced last month to
vacations for salaried workers and coverage for pharmacy dispensing fees.
They also come on the heels of a generous tentative
agreement with unionized Hamilton Steel employees that includes healthy
increases to wages and benefits.
"I do not believe I need to reiterate the reasons for
this review," Stelco CEO Rodney Mott said in letter to employees last
week. "In my prior letters, I have advised that the benefits programs have
been very costly and escalating at a rapid rate."
In an interview yesterday, Mott would not go into details on
the cuts.
"I really don't see how that's a news event," he
said. "That's something where a company's dealing with (its) own
employees... It's a normal course of business type of thing."
The cuts -- effective Jan. 1, 2008 -- will require salaried
employees to pick up a portion of drug and dental care costs, will eliminate
15-weeks of pre-retirement vacation and will tighten up pension availability.
The changes apply to all current salaried workers and those
who retire after Jan. 1, 2008.
"The company's let us down," said one salaried
employee. "Most of the guys I work with have been here 20 to 25 years and
this is how they get treated? People are terrified of what's next."
Salaried employees were informed of the cuts last week, when
Stelco was still in the midst of negotiations with unionized Hamilton Steel
workers, represented by Local 1005 of the United Steelworkers. Those talks
culminated in a tentative deal announced yesterday that would see unionized
employees get wage increases ranging from $1 an hour to nearly $4 an hour over
two years, plus a cost of living increase of $1.40 by 2010. Workers eligible
for retirement were also offered a $20,000 bonus if they retire by year's end.
During previous negotiations most union workers received a
15 cent per hour wage increase. A ratification vote on the deal will be held on
June 21.
"The union's laughing with the deal they got,"
said the salaried employee. "How are the salaried guys supposed to feel
when they see that?"
The most disturbing cut for many salaried employees had to
do with their pensions.
The current pension eligibility rules allow salaried
employees to qualify for a full pension after 30 years of service. Under the
new rules, employees who have not served 30 years by Jan. 1, 2008, will have to
wait until the age of 60 to receive full payment. Those who choose to retire
before age 60 will get a reduced pension.
Salaried workers will also be forced to pick up 20 per cent
of dental care and prescription drug costs. Stelco will also eliminate a
provision for 15-weeks of pre-retirement vacation for all those salaried
workers who have not completed 30 years of service by the end of 2007.
"Personally, I don't like what's happening to the
salaried employees," Rolf Gerstenberger, president of Local 1005, said
after the union deal was announced. "At the end of the day we've always
said they should organize to protect their rights."
Stelco's $20,000 retirement incentive for unionized
employees suggests a definite attempt to reduce the number of Hamilton
employees and improve efficiency, said Chuck Bradford, a steel analyst with New
York-based Soleil Securities. In the rapidly consolidating steel industry, the
changes at Stelco could also make the company more attractive to global
steelmakers seeking a North American asset, he added.
"It does make the table look better," Bradford
said. "But I think anybody interested in Stelco will probably sit back
awhile longer to see what happens next."
In other news, Stelco also announced the resignation of
former chief operating officer Colin Osborne, effective July 1. Osborne was
named vice president of strategy and business development shortly after Mott
took the reins at Stelco.
npowell@thespec.com
905-526-4620
KEY CHANGES INCLUDE:
* Tightened pension eligibility rules
* Eliminating 15 weeks pre-retirement vacation
* Requiring employees to pick up 20 per cent of dental and
prescription drug expenses