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The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article by Business Reporter Steve Arnold published in the January 6, 2004 edition |
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Jan. 6, 2004.
01:22 AM |
Stelco president promises openness
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New steelmaker boss may open books to gain labour
peace and mutual trust, respect |
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By Steve Arnold |
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Stelco's new president hopes to overcome
almost 60 years of bad labour relations to save the giant steelmaker. In his first interview since taking over
the company Jan. 1, Courtney Pratt said he's counting on Stelco's workers to
help in the rescue mission. And to get that support he's promising a
new degree of openness with leaders of the United Steelworkers of America,
which could go as far as opening the battered company's books to prove the
situation is as bad as executives have claimed. "I don't expect them to respond to
just me saying 'trust me, we've got problems.' That doesn't work," he
said. "The essence of good labour relations is mutual trust and respect
and that takes some time to develop." Union support for a major
cost-restructuring of Stelco is seen as a critical element in reviving the
foundering giant. Steelworkers leaders have so far resisted
company pleas for cost relief, saying before they give up anything they want
more than the assurances of management that the cuts are needed. "Believe me, I am not naive. There's
a lot more involved here than me sitting down at a table and saying this is
what I want to achieve," Pratt said. "It takes working through issues, it
takes sharing information. In my experience, this stuff all starts with being
open and transparent. With labour unions, if they believe you are not being
open with information, they won't trust anything you say. "There are some rules out there with
respect to disclosure, which puts some limits on what you can disclose. But
if they want to see it and it's not secret for some reason, then sure,"
he said. "The only way we can win their
support ... is for them to basically see the information we're using to come
to conclusions about the situation the company is in." The problem Pratt wants union leaders to
recognize is that Stelco simply can't compete in a North American steel
industry where its competitors have sharply lower costs of production. "What's wrong with the company is
it's not profitable right now, it's consuming cash and fundamentally we're
not competitive," he said. Stelco's current problems are the result
of a number of factors -- low steel prices, a bad product mix, the sudden
rise in exchange rates, cheap foreign imports and a weight of pension and
post-retirement benefits costs which American competitors shed through
court-supervised restructuring. Pratt's emphasis on healing Stelco's
poisoned labour relations reflects his background in human resources -- first
at a Montreal-area community college and later with a consulting firm before
he joined Royal Trust to put into practice the ideas he had been advising
other firms to adopt. In 1987 he joined Noranda as executive vice-president
for human resources and strategy. His vocabulary reflects his background. He
speaks of "stakeholders" who have a right to be consulted in the
affairs of the company and of the need for "dialogue" to win
commitment to a corporate mission statement. "I'm a great believer in stakeholder
dialogue, stakeholder consultations, making sure that stakeholders understand
what the company is doing," he said. "They may not like every
decision, but they have a right to know and in many instances a right to be
consulted." As for Stelco's future, Pratt said most of
the decisions to be made will depend on the results of a detailed study now
in its final stages. "We're getting a very detailed
analysis of our prospects and our current situation, taking into account all
of the environmental factors and looking at a range of scenarios," he
said. "Part of the work that has been done has been putting together a
comprehensive model for the company. It has been understanding our cost situation
relative to our competitors and getting a better understanding of where the
steel industry is going." A formal court-supervised restructuring is
still a possibility, Pratt said, but one the company wants to avoid. "That's one of the alternatives that
we're looking at, but we are also looking at others. We hope to do it without
CCAA (the Companies' Creditors Arrangement Act) but it's certainly something
we have to be prepared for." Pratt added that he didn't take the job to
oversee the death of Stelco. "I would not have accepted the job to
preside over the death of the company. My job is to develop a plan to restore
this company to the kind of greatness it once had," he said. "It's
a tough job, but that's the job that I came to do, not to wind the company
up." On the hot-button question of Stelco's
under-funded pension plans, Pratt said those growing costs will have to be
controlled, but he's sensitive to concern this raises for workers. "It's enormously complex and
something we are putting a lot of work into," he said. "I want
people to understand that we know that is a source of great anxiety and is
not a subject to be dealt with lightly or cavalierly." At the end of the third quarter Stelco
reported losses of $168 million. Its stock, which has risen recently, fell
seven cents yesterday to close at $2.42. sarnold@thespec.com 905-526-3496 |