Stelco plant union votes for strike deadline

Stelco plant union votes for strike deadline

Wednesday morning, July 27, union members at one of North America’s most modern steel mills announced they will set a 90-day deadline to get a contract or call a strike. The United Steelworkers of America Local 8782, representing 1’000 workers at Stelco Inc.’s Lake Erie Works in Nanticoke, Ontario, cast their votes Monday. A union spokesperson said 98 percent of its members have chosen “to take necessary action up to and including strike action to bring about a settlement with the company.” This strike notice comes less than two weeks after Stelco outlined a restructuring plan the union opposes because they say it includes a 10-year freeze on pension benefits. By Wednesday afternoon, Stelco president and CEO Courtney Pratt had issued a response to the strike issuance. He denies the union’s claim that the restructuring plan asks for a 10-year freeze, countering that the plan proposes “that pensions not increase until the pension plan deficiency reaches an agreed funding ratio. This protects the active work force and retirees by ensuring that the pension deficiencies are dealt with once and for all.” “While our pension funding plan takes a different route than the one favored by the Locals' leadership, the destination and the outcome are the same. Stelco is not in default of any of its pension funding or other employee related obligations.” He continues by advising the union to “reconsider the path of confrontation it alone has chosen, to tone down the rhetoric, to resume discussions, and to ease the uncertainty and instability surrounding this last push for a positive outcome for employees, retirees and other stakeholders.” Stelco has been legally insolvent since its swollen pension deficit pushed the company to declare bankruptcy in January 2004. However, the company has recently been enjoying soaring profits due to the worldwide commodities boom. Disputes between Stelco and the USW increased last summer when the Erie Works’ previous contract with Stelco expired and was not replaced. Besides a new contract, the union wants Stelco to put a significant down payment on its over-inflated deficit. The USW, which represents 5’000 of Stelco’s 8’900 workers, proposed a 1.09-billion Canadian dollar (CA$) restructuring offer from Tricap Management Ltd., which would inject CA$406.6 million into Stelco's CA$1.3-billion pension plan shortfall, raising CA$325.3 million in new equity and providing CA$81.3 million to pay off secured debt. Stelco rejected the offer, saying that it would anger shareholders because it favors workers too heavily. Stelco’s recently-proposed restructuring plan would add only CA$162.6 million to the deficit and effectively freeze pension benefits for employees. Stelco still hopes to implement its restructuring program by September 30 and last week was granted a stay in court protection from creditors until September 9.