The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following Editorial by Robert Howard published in the October 21, 2004 edition
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Oct. 21, 2004. 12:48 AM |
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Stelco's steps to recovery |
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By Robert Howard |
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Good news for Stelco is good news for Hamilton. Even though the company is not the dominant local employer it used to be, it remains one of the keystones of the city's industrial base and Hamilton's economic health is still closely bound to the company's fortunes. The survival and long-term viability of a restructured Stelco is vital. So there should be widely felt relief at the five-minutes-to-midnight agreement reached this week between Stelco and General Motors, which should see Stelco continue to supply automotive steel to the giant carmaker in at least three quarters of 2005. GM had applied to the court overseeing Stelco restructuring for permission to cancel its 2005 contract because of the potential for a strike at the company's Lake Erie plant. Chrysler has also said it might follow suit for the same reason. The GM agreement is very good news for the company because automotive steel contracts provide assured business for a profitable product. Losing GM's business could have started a downward spiral from which Stelco might not have been able to recover. But this compromise agreement sets a confident tone for Stelco to take into talks with Chrysler and other major customers. All bets are off, of course, if there is a strike. A prolonged labour disruption would be disastrous for Stelco's important automotive-steel business because carmakers and their suppliers, which long ago replaced warehousing with "just-in-time delivery," have to rely on a steady supply of steel. If the supply stops, the assembly lines at the auto plants grind to a halt not long after. So this now puts the onus on both parties -- company and union -- to reach an agreement. The company has a responsibility to negotiate in good faith and make a fair offer that takes into account not just its financial plight, but also the improved world steel market and Stelco's prospects based on keeping such customers as GM. The union has a responsibility to do much the same -- and get the best deal it can for its members. It takes two to make a deal, so both sides must step up. Hamilton Mayor Larry Di Ianni did a good thing in bringing the company and union together in his office. He's right to use the auspices of his office to stress the community-wide importance of a peaceful agreement. The other major development in the ongoing Stelco saga is court permission for the company to try to sell subsidiary companies in Hamilton, Burlington, Welland, Quebec and Alberta. The company has said its restructuring plan is based on concentrating on a core business of value-added automotive steel and that selling the side businesses will begin the process of raising needed capital. Despite expressions of concern and criticism from some employees and the union representing Stelco workers, the proposed sale makes sense and may result in few, if any, jobs, being lost. It would also bring focus (and capital) to the core business. Doing just a few things very well is a strategy that has paid off handsomely for, among others, Hamilton's other steelmaker, Dofasco. It's a long road back from loss to profit but Stelco is today a few steps farther along |