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
21, 2006 edition
By Naomi Powell
The Hamilton Spectator
(Jun 21, 2006)
Stelco is targeting almost a third of its workers for
buyouts and retirement. It is offering a full year's pay to salaried employees
who resign or retire by the fall. Last week, the steelmaker unveiled a $20,000
golden handshake for 1,000 unionized workers eligible to retire in 2006.
Spokesperson Helen Reeves said the salaried buyouts,
announced Monday, are part of a plan to reduce salaried employees and
"simplify staff functions."
Stelco, once a major employer, with more than 11,000
employees, is now down to 4,800 workers.
The latest cuts, which would shrink the workforce by about
30 per cent, are part of a massive restructuring to make the company
competitive following two turbulent years in bankruptcy protection.
"There's no doubt the big financial moves at Stelco
were made last year. Well now it looks like the big human resources moves are
taking centre stage," said Peter Warrian, a University of Toronto
professor who specializes in steel industry issues. "They've said they
need to get overall costs down and now they're doing it."
The salaried buyout is open to at least 370 of Stelco's
1,400 salaried employees who are already eligible for retirement, based on last
year's figures. All but 300 of those are in Hamilton, with the rest in Stelco's
Lake Erie operations.
But the deal is also being offered to salaried employees who
have not yet completed the 30 years of service necessary to qualify for their
pensions. The company would not provide the size of this group or any
particulars on the salaried buyout.
Last week, a $20,000 retirement bonus was offered to about
1,000 of the 2,400 unionized employees at Stelco's Hamilton Works. That offer
was part of a tentative labour agreement between the company and Local 1005 of
the United Steelworkers, representing workers at Hamilton Steel (formerly
Hilton Works.)
Workers will vote on the deal today.
"It's no surprise they're making this move," said
Sherman Cheung, a professor at McMaster University's DeGroote School of
Business. "They have to downsize and rework operations."
The head count at Stelco has been dwindling steadily in the
past 20 years, dropping to about 4,800 workers from more than 11,000 employees
in 1987.
Local 1005 alone, once the largest steel union in Canada,
dropped to 2,400 workers this year from more than 5,200 in 1996. If all
eligible employees take the $20,000, Local 1005 will be cut by a further 40 per
cent.
Union president Rolf Gerstenberger has said that is
unlikely. He refused to speculate on how many might leave.
Stelco hasn't said if it will replace any of the workers.
But the steelmaker must do more that cut back on employee
numbers to increase its productivity, Warrian said.
"It will make the company more efficient, but you can't
cut your way to success," Warrian said. "You have to restructure not
just the workforce but the facilities and operations as well. What I want to
know is, what's the forward plan?"
Stelco's tentative agreement with Local 1005 includes a
drastic restructuring of the unionized workforce, with 28 job classes reduced
to eight and workers assuming a broader range of duties.
Workers have also been offered profit-sharing and biweekly
bonuses tied to productivity.
The moves are similar to those Stelco CEO Rodney Mott made
in his previous role as chief executive of International Steel Group, the
Ohio-based steel operation that nearly died before it was bought by American
billionaire Wilbur Ross.
At ISG, Mott reduced salaried workers by 80 per cent and cut
the unionized workforce by 20 per cent, said Leo Gerard, president on the
international arm of the United Steelworkers.
Job classifications were reduced from 34 to five with
unionized employees retrained to take on the duties previously covered by
salaried workers.
npowell@thespec.com