The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Mark McNeil published in the November
12, 2004 edition
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Nov. 12, 2004. 12:51 AM |
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No concessions, USWA tells Stelco
bidders |
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By Mark McNeil |
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The United Steelworkers say they don't care who ends up running Stelco -- they will not give any concessions to help the company restructure. "Everyone who works for Stelco knows how much money the company is making," says Bill Ferguson, the president of Lake Erie Local 8782. "The steel is going out the door like there is no tomorrow." Unions, however, almost always agree to revise their collective agreements to help companies that are going through bankruptcy protection. That's what happened with Air Canada and Algoma, among others. Usually union members are forced to make a choice between taking a hit on their contract or the plant closing down. Faced with that, they usually agree to concessions. But union leaders from the United Steelworkers of America believe that Stelco is in no danger of shutting its doors after making $100 million in the last two quarters, and "with the lineup of bidders we are seeing today, a lot of folks see a lot of value in Stelco well into the future," said Ferguson A bidding war erupted in recent days that has seen at least four proposals come forward -- from Russian steelmaker OAO Severstal, German Deutsche Bank, Toronto-based investment firm GMP Capital Corp., as well as a shareholder group headed by Clearwater Capital and Equilibrium Capital. Details of the various plans have not been revealed but calls for contract concessions are expected. Thomas Veraszto, deputy director general of the Severstal Group, said that company's proposal would likely call for changes to existing collective agreements. "We certainly will not ... walk away from any obligations the company has with former or current employees. But at the same time the company has to be made competitive. "The stakeholders have to sit together and agree with something that is in the interest of all of them because if the company goes bankrupt it will be to no one's advantage. (Especially) the employees who will lose their jobs." That's precisely the story United Auto Workers members were told by Severstal after the Russian steelmaker made a $285 million bid on bankrupt Rouge Industries in Dearborn, Mich. Workers at Rouge, now known as Severstal North America, agreed to a range of concessions. But Jerry Sullivan, president of the UAW local 600 said it was necessary. "We basically formed a partnership to get things done to preserve jobs." And since the purchase concluded in January, Sullivan says, it has been a "very positive" experience for workers who are thrilled to have received profit-sharing cheques for the last two quarters. "There were things we had to give up (in the collective agreement). But we have language that says if we reach certain quality and productivity points we get the provisions back. And so far we have 75 per cent of (our old contract) back." Severstal also agreed to pick up health insurance costs for the company's 150 pensioners, a major expense in the U.S. Pension payments are being handled by a government fund in the U.S. And precise terms are still being worked out. Unlike in Canada, companies that buy bankrupt firms are not expected to take on legacy costs. mmcneil@thespec.com 905-526-4687 |