Steelworkers Provide Update on U.S. Steel Canada Mediation

TORONTO – United Steelworkers (USW) Locals 8782 and 1005 advise members and retirees on the progress of U.S. Steel Canada’s CCAA process.

USW has just completed five days of mediation in Toronto and the mediation is ongoing. The mediation is confidential and the parties cannot provide any details of discussions that have and are continuing to take place.

While few details are available, USW can say that discussions are continuing and have not broken off.  

“To our thousands of members and retirees: we will continue to defend your jobs, your pensions and your benefits, that you have fought for and that you deserve,” said Gary Howe, President of USW Local 1005 in Hamilton.

“Throughout this process, our priorities have not changed. We will do all in our power to protect our members’ pensions, their crucial health benefits and of course Steelworker jobs,” said Bill Ferguson, President of USW Local 8782 in Nanticoke.

“We want to move forward and keep making steel in Hamilton and Nanticoke,” said Rob Newstead, Unit Chair of USW Local 8782 Pickling Division.

A number of motions were to be heard by the Ontario Superior Court this week. Those motions have now been rescheduled for October 7 and 8.

“As there are no longer any scheduled public proceedings this week, we instead call on our members, retirees and supporters to join us to witness public proceedings before the court on October 7 and 8,” said Ferguson.

Motions to be heard by the court on October 7 and 8 include the U.S. Steel Canada motion to stop making certain pension plan contributions and to stop paying for crucial benefits for retirees known as OPEBs (other post-employment benefits). The USW has condemned this motion and is opposing U.S. Steel Canada’s efforts to avoid its responsibilities to its employees and retirees.

Retirees received a letter from U.S. Steel Canada dated September 18 that caused confusion and alarm. USW Local 1005 and USW Local 8782 are working to address the concerns of that letter. Our members and retirees can expect to receive another letter from U.S. Steel Canada in the near future, regarding the debtor-in-possession (DIP) financing and OPEBs.

USW hopes to have more information for members and retirees very soon.

“We will continue to stand together and fight hard for our members and retirees throughout this process. We’re Steelworkers,” said Marty Warren, USW Ontario Director. “We know that Hamilton Works and Lake Erie Works can succeed as stable, long-term, profitable businesses with good jobs and retirements for our members.”

###

For further information:

Gary Howe, President, USW Local 1005, 905-531-4078, gary.howe@uswa1005.ca
Bill Ferguson, President, USW Local 8782, 905-537-8782, president@uswa8782.com
Tony DePaulo, Assistant to USW Ontario Director, 416-243-8792, 905-869-0760, tdepaulo@usw.ca
Bob Gallagher, USW Communications, 416-544-5966, 416-434 2221, bgallagher@usw.ca

 

 

 

Steve Arnold

Hamilton Spectator  |  Sep 18, 2015

 

LOCAL 8782Bill Ferguson, president of United Steelworkers Local 8782 at the Lake Erie plant, speaks at a press conference responding to the latest court filings suggesting U.S. Steel needs to stop paying many costs to avoid failure by the end of the year.LOCAL 1005-CONFERENCEBill Ferguson, president of Local 8782 Lake Erie plant, speaks as Tony DePaulo, District 6 director, looks on at a press conference responding to the latest court filings suggesting that U.S. Steel needs to stop paying many cost to avoid failure by the end of the year. Gary Howe, president of Local 1005, is seen in the background.

U.S. Steel Canada says it will collapse by the end of this year if it doesn't get a court order allowing it to reduce payments to pensioners and to stop paying other costs such as city taxes.

At the same time, its American parent is asking for permission to stop supporting the struggling former Stelco and to be allowed to move production of its highest value steel out of Canada.

Both suggestions, contained in new court documents, drew immediate outrage from leaders of the United Steelworkers and local politicians.

"I'm just sickened by this attack on the most vulnerable people in our society," said Gary Howe, president of Local 1005 in Hamilton.

Tony DePaulo, assistant director of the union's Ontario region, called the threats "just another attempt by U.S. Steel to bully us," adding "This company has reached an all-time despicable low" by targeting pensioners.

In a news release, letter to employees and documents filed with the Ontario Superior Court, USSC said if it doesn't cut health benefits for retirees and payments to its badly under-funded pension plans, it won't survive beyond the end of this year.

USSC president Mike McQuade said the Canadian situation went from challenging to dire when the American parent company decided to move production of 180,000 tons a year of high-grade auto steel out of Canada. The move would cut revenue to the Hamilton plant by as much as 40 per cent.

"(W)ithout court approval of U.S. Steel Canada's motion, we don't see any way to avoid ceasing operations at the end of 2015," he wrote. "If this court order is granted we expect to preserve jobs and continue to deliver high quality steel products to our customers from both Lake Erie Works and Hamilton Works through 2016."

In new court filings, USSC asks for approval of a "Business Preservation Plan" allowing it to stop paying municipal property taxes, special pension contributions and supplements, health benefits for retirees, salary continuance for employees who left their jobs under special agreements, payments to the provincial Pension Benefits Guarantee Fund and some payments to its parent company U.S. Steel Corporation.

The cuts would affect supplementary pensions paid directly by USSC.

Since the start of its restructuring process, the company said it has paid about $5.9 million a month into its main pension plans and expects to pay another $23.6 million by the end of the year. Through 2016, pension costs could be as high as $18.6 million per month under normal pension funding rules.

"In light of the difficult financial circumstances now facing USSC, the company no longer has the financial resources and flexibility to continue to make these pension and retirement plan contributions and payments during its restructuring proceedings," the company said.

Health benefits for 20,600 retirees and their dependants are valued at $871 million as of Aug. 31. Without court relief, the company said those costs are expected to be $14.4 million for the balance of 2015.

"If the proposed Business Preservation Plan is not implemented now, the cash burn of USSC will be so significant that it would be unreasonable to continue operations (even if it had the cash, which it does not)," the company said.

The company's motion also seeks permission to suspend its sales process other than for its harbour front land.

"Despite the best efforts of USSC's Financial Advisor and USSC under the (sales process), the unwillingness of stakeholders to make the contributions and compromises required by bidders as conditions to their offers, and the unwillingness of bidders to modify their conditions in a manner acceptable to stakeholders, has resulted in none of the offers for the ongoing business being executable," the company said.

The alternative to its plan, the company said, is a "'hibernation' scenario which would involve the … orderly wind-down of USSC's operations and the idling of its facilities pending a future sale opportunity or liquidation."

Even with the cost cuts requested, the company said its business plan "contemplates that USSC will continue to operate at a significantly reduced level for the next 12 to 15 months when a blast furnace reline may be necessary, at which point USSC will not undertake the blast furnace reline or inventory winter buildup and both Hamilton Works and Lake Erie Works will be idled and placed on care and maintenance."

As the Canadian arm struggles to survive, U.S. Steel, of Pittsburgh, has filed materials asking for court orders allowing it to demand the Canadian company post cash deposits for anything it buys from the parent or for permission to end all support to the Canadian company by Dec. 10.

In its motion, the American parent said it submitted offers to buy parts of the Canadian arm, but with that offer rejected, it has no choice but to move production of auto steel out of Canada.

Where auto contracts are typically for a single year, several auto makers are asking for longer terms and USSC's plants can't be relied on for those longer terms.

"In the absence of certainty regarding USSC's ability to remain in production throughout the contracted time periods under discussion … USS cannot count on, or 'bid' USSC's capacity … (and) must rely upon the footprint of its plants where production capacity is certain."

The company also argued moving production out of Canada would allow auto steel to be made in mills closer to its customers.

Bill Aziz, USSC's chief restructuring officer, said in an affidavit that diverting auto steel production out of Canada is highly unusual because auto makers like Ford and GM typically require their supplies to come from specific plants they have certified as meeting their standards. While the Hamilton and Lake Erie mills have been certified and have long histories of supplying auto customers, several of U.S. Steel's American plants do not.

The only times the Canadian plants were unable to serve auto customers have been the three times workers were locked out by U.S. Steel to enforce contract changes.

Aziz also said losing that production would seriously harm the Canadian operation.

"It is clear that any diversion of production from USSC for the remainder of 2015 would result in a sudden, marked decrease … in revenue and earnings. These plants have fixed costs and require sufficient volumes to remain viable," he wrote.

Aziz added the diversion would cut volume through the Hamilton mill's Z line coating facility by about 25 per cent. It could also trigger a default under some of USSC's credit lines, make the plants "significantly less attractive to a potential purchaser," and would take management attention away from the restructuring effort.

"The effect of the Diversion Decision is to reallocate a key revenue stream from USSC to USS at a time when stability and preservation of the status quo at USSC is most critical," he added.

In separate filings USSC, the United Steelworkers and a group of active and retired salaried employees all ask that the diversion of production be declared a breach of the court order that gave USSC creditor protection last year.

At a Friday afternoon news conference, union leaders called the company threat an attempt to bully workers into giving up benefits and pensions earned over a lifetime.

"A lot of people out there are going to be worried, but that's how U.S. Steel operates," said Bill Ferguson, president of the USW Lake Erie local. "U.S. Steel has made it known they are going to go after the most vulnerable in our community. They want something and they are not holding back. They're going after everyone."

DePaulo said Friday's news conference was only the first response by the union.

"We're going to have a lot of these and demonstrations. We're going to take it to the streets just like we did before," he said. "As far as I'm concerned, it's just despicable. I couldn't believe anyone would use that as a threat."

In response to a request for additional comment, U.S. Steel Canada referred to its filing and its news release.

Political reaction to the threats was also swift and negative.

"The motions before the court threaten the sustainability of current production at local facilities and will have great impact on those retirees in our community," said Mayor Fred Eisenberger. "I am requesting a response from all parties in the federal election to the question: what actions are they prepared to take to protect all involved? I intend to leverage their ability to support the motions in front of the court."

Coun. Sam Merulla, vice-chair of the city's steel committee, also emphasized the election. "I don't think it's a surprise (the company) is going to try to get out of its obligations," he said. "At this point, a federal election is on, so we need to focus on demanding answers and solutions from the government."

Coun. Scott Duvall, chair of the steel committee and now an NDP candidate on Hamilton Mountain, said the company is pushing boundaries further than ever.

"We haven't seen them try to go this far before," he said. "It is so disappointing. This is supposed to be a restructuring process, but it looks a lot more like dismantling."

Both councillors said they're awaiting updates from the city's finance and legal departments on tax implications for the city. A recent study suggested losing U.S. Steel would result in annual losses of $2 million in water and sewer revenues and nearly the same in taxes.

A common theme among federal and provincial politicians was anger at the Harper government for not releasing a 2011 agreement under which it dropped a lawsuit against the company for breaching the production and employment promises it gave in 2007 when it was allowed to buy Stelco.

"It is unconscionable that the federal government won't enforce the contractual agreement with U.S. Steel and is allowing this company to bully it, and it is a disgrace that the federal government is not standing up for the people of Hamilton, Nanticoke and surrounding areas," NDP MPP Paul Miller said.

Miller and Duvall are both Stelco veterans.

Hamilton Liberal MPP Ted McMeekin weighed in on Twitter, declaring "Pensioners worried about actions of US Steel deserve answers" and calling on the federal government to reveal details of the "secret deal."

Hamilton Centre NDP MP David Christopherson said it is "Just not acceptable to threaten retirees with their pensions and benefits. It's not only un-Canadian, it's bloody well inhumane and it needs to be stood up to now."

He said if the NDP takes power in the Oct. 19 federal election, "One of the first things we would do is throw every lawyer we can find in the Canadian government at whether or not there is some way to get this document released because that's the key to everything. We need that document to know exactly what promises were made and which ones were kept."

Christopherson also challenged MPs Dean Allison and David Sweet, the only Tory incumbents in the Hamilton area, "to stand in front of this community and defend or distance themselves from the actions of their own government. It's no more acceptable for those Conservative MPs to remain silent than it is for the federal government to keep that document hidden."

The federal industry minister has repeatedly said only U.S. Steel can release the agreement and it has refused.

In a news release, Flamborough-Glanbrook Liberal candidate Jennifer Stebbing, challenging Sweet, also condemned the Conservative government "for once again failing to protect Canadian workers.

"These are hard-working Canadians, many of whom put decades of dedicated service working at US Steel and now are being abandoned by the government. Where is the prime minister's so-called economic leadership?" she asked.

The USSC motion is to be heard in court in Toronto Sept. 28. The company and workers have also been ordered into mediation to try to solve their difference. That session is expected next week.

The issue will also be aired at a town hall meeting to be held Monday at 4:30 and 7:30 p.m. at the Port Dover community centre.

 

With files from Matthew Van Dongen

sarnold@thespec.com

905-526-3496 | @arnoldatTheSpec

 

 

Matthew Van Dongen

Hamilton Spectator  |  Sep 18, 2015

 

U.S. STEELU.S. Steel Canada has applied for relief from a variety of expenses.

U.S. Steel Canada is asking for court permission to stop paying property taxes months after the city gave the cash-strapped company a $7.1-million rebate.

The company, which is under court-ordered creditor protection and trying to sell part or all of its 325-hectare property on Hamilton Harbour, has submitted court filings asking for relief from a range of expenses including taxes, health benefits for retirees and special pension contributions.

Without that relief, "we don't see any way to avoid ceasing operations by the end of 2015," said president Mike McQuade in a letter to employees earlier this week.

[ U.S. Steel Canada wants to scrap pension-fund payments, retiree benefits and Hamilton taxes ]

The request for tax relief comes as "a bit of a shock," said taxation director Larry Friday, because the city and the beleaguered company only finished negotiating over payment of tax and water bills last March.

Even after recent successful assessment appeals, U.S. Steel pays about $5.8 million in annual property taxes, good for third-highest on the list behind ArcelorMittal Dofasco and Lime Ridge Mall.

"Our understanding was the court process would ensure those bills would continue to be paid," Friday said.

The city found out early this year it owed the steelmaker more than $7 million in rebates as a result of a successful assessment appeal covering the years 2009 through 2014.

Friday said the city was worried about the company's precarious financial position and so only provided the rebate after U.S. Steel agreed to make a $250,000 deposit against future water bills and an early property tax payment in March.

The negotiations included an agreement by U.S. Steel officials to continue paying property taxes as outlined in the initial court order governing the restructuring process, said city spokesperson Mike Kirkopoulos.

U.S. Steel has another scheduled tax instalment coming up in October but is otherwise paid up.

The city will oppose the company's tax request and support motions from the steelworkers' union and retirees, said Mayor Fred Eisenberger, who is vacationing out of the country but issued a statement Friday.

"We are intent on doing what we can to make our case for minimizing the impact of the tax-related inclusions in the motion," he said. The city also expects to take part in mediation and touch base with both provincial and federal representatives as soon as possible.

A recent economic impact report suggested the city would lose annual tax and water revenues of about $1.9 million and $2 million, respectively. Even a completely vacant U.S. Steel property, however, would still be worth about $4 million in taxes a year.

If the courts allow the cash-strapped company to temporarily stop paying taxes, Friday said, it's "unlikely" the city would lose out for long.

While the company is applying to stop the restructuring process, it is still trying to sell some or all of its 325 hectares of land.

In a worst-case scenario — say if the company paid no taxes for three years — the city could then legally put the property up for tax sale.

"I'm pretty sure there would be some interest in a $100-million property on a working port," Friday said.

 

mvandongen@thespec.com

905-526-3241 | @Mattatthespec

 

Matthew Van Dongen is city hall reporter for the Hamilton Spectator. Reach him on Twitter @Mattatthespec

 

 

 

Hamilton Spectator  |  Sep 17, 2015

 

U.S. STEELU.S. Steel will reportedly seek a court order to continue its restructuring under court protection.

U.S. Steel Canada Inc. will seek a court order to continue restructuring under court protection beyond this year, the company said Thursday.

The former Stelco Inc., purchased by U.S. Steel in 2007, has been operating under Companies' Creditors Arrangement Act protection since September 2014, and it was most recently extended until Dec. 11, 2015.

[ Judge orders U.S. Steel and stakeholders into mediation ]

The company said it has been unable to negotiate a sale of its operations in Hamilton and Nanticoke, Ont., or reach a restructuring agreement, and without an extension of the court protection it would likely have to cease operations at the end of the year.

"With a court order we can preserve work and meet obligations to approximately 2,200 employees and continue to deliver high-quality steel products to our customers from our two Canadian steelmaking facilities," said Michael McQuade, president and general manager of U.S. Steel Canada. "The court order, if granted, would also provide additional time to find a consensual restructuring solution, and to conduct a new Sale and Restructuring Process when market conditions improve."

Also contributing to the need for this court order are the steps taken by U.S. Steel Canada's parent company, United States Steel Corp., to reallocate Canadian production to its facilities located in the U.S., the company said.

As part of the extension request, the company will ask the court to allow "the immediate suspension of all pension funding contributions, except contributions for current service." Payments to retired employees and surviving spouses from company pension plans would continue, but supplementary pensions paid directly by U.S. Steel Canada would be suspended.

It also wants to suspend payments of post-employment health, medical, dental and life insurance benefits in the near term, and suspend real property tax payments.

 

The Canadian Press

 

 

Steve Arnold

Hamilton Spectator  |  Sep 17, 2015

 

US STEELU.S. Steel and its stakeholders have been ordered into mediation.

A retired judge has been asked to break the logjam keeping U.S. Steel Canada from restructuring under creditor protection.

In an order issued Wednesday, retired Ontario Superior Court associate chief justice Douglas Cunningham was appointed mediator to get the company, its workers, the provincial government and American owner together on a plan to save the former Stelco.

Justice Herman Wilton-Siegel, who has been overseeing the troubled restructuring for one year as of Wednesday, said he was ordering the parties into mediation to find a "comprehensive agreement" that will get the troubled steel mill back to work.

In his order the judge said the mediation is also to look at "a business plan for U.S. Steel Canada Inc. in the light of current circumstances, including the status of the company's sales and restructuring process and issues resulting from the … allocation of production and finishing to the company's (American) works by U.S. Steel Corporation."

Wednesday marked the first anniversary of U.S. Steel Canada filing for creditor protection. It cited years of losses, deteriorating business conditions and the cost of topping up its badly under-funded pension plans.

Since then, it has launched an effort to find a new buyer for all or parts of the company's operations in Hamilton and Nanticoke. The American firm has also filed a claim for $2.2 billion in debts it says it's owed by its Canadian arm.

That claim is being opposed by the provincial government, unionized and salaried workers and retirees and former Stelco president Bob Milbourne. They argue the claim is nothing more than an attempt to recover the cost of buying Stelco in 2007.

They also fear if the claim is accepted as legitimate, the American company will use that debt to buy the Lake Erie Works in a deal that will produce little or no cash to top up the pension plans that support 14,000 local retirees.

U.S. Steel has not yet filed any material directly relating to these arguments. In its initial motion, filed in May, it argued its claims had been recommended by the monitor.

The company also fought, and lost, an argument that objections to its claims should be dealt with in an entirely separate legal process rather than as part of U.S. Steel Canada's restructuring under creditor protection.

The second issue blocking a settlement is the American parent's announcement that it intends to move monthly production of 15,000 tons of its highest value products for its best customers out of Canada to its U.S.-based mills.

In his most recent report, court-appointed monitor Alex Morrison said the U.S. Steel plan would deprive Hamilton Works of a quarter of its business and shave $40 million in revenue this year and $160 million next year.

The United Steelworkers union has prepared a motion asking for an emergency injunction to block that move. The mediation, union leaders say, is an effort by the court to settle that point without a bitter hearing.

"The judge wants us to try to mediate this before dropping our motion," said Bill Ferguson, president of the Lake Erie Works local. "We'll go ahead with this and see what can be accomplished."

Gary Howe, president of the Hamilton local, said because U.S. Steel has been "difficult" throughout the restructuring process he's not optimistic about the mediation effort.

"Am I hopeful something can be worked out? I don't like the term hopeful," he said. "In the normal course mediation might move things forward, but there are a lot of issues to be discussed here."

In an email U.S. Steel Canada spokesperson Trevor Harris said, "We welcome the court's direction that the principal stakeholders attend a mediation to address the feasibility of a comprehensive agreement. We are hopeful that the mediation will assist stakeholders in reaching agreement on a restructuring solution that will allow our business to compete in the global steel market."

The mediation effort is expected sometime next week, but a firm date has not been set.

 

sarnold@thespec.com

905-526-3496 | @arnoldatTheSpec

 

 

Steve Arnold

Hamilton Spectator  |  Sep 15, 2015

 

COURT ACTIONThe Province, unionized and salaried workers and a former Stelco president expect to be in court Wednesday to oppose claims by U.S. Steel that it is owed more than $2.2 billion by its struggling Canadian arm.

Two critical legal battles for the future of U.S. Steel Canada are reaching the boiling point.

In one action, the provincial government, unionized and salaried workers and a former Stelco president expect to be in court Wednesday to oppose claims by U.S. Steel that it is owed more than $2.2 billion by its struggling Canadian arm.

The second fight is against an announcement by the American firm that it will move production of its highest-value products for its best customers out of Canada to its U.S. mills.

At stake in the first contest are potential cuts of up to 15 per cent in the retirement income of 14,000 former Stelco workers in Hamilton and Haldimand.

Opponents of the parent company fear if its debt claims are accepted as legitimate, U.S. Steel will use that debt to buy the Lake Erie Works in a deal that would produce little or no cash to top up the badly underfunded pension plans.

When the four main Stelco/U.S. Steel Canada plans were last evaluated, they were more than $830 million short of what would be needed to pay all promised pensions if the company were to go out of business.

Former Stelco president Bob Milbourne, who led the company from 1991 to 1996, has become a leading voice of the opposition to the American claims. Along with workers and the province, he argues the company's debt claims are really just an attempt to recover the cost of buying Stelco.

Those costs, in business jargon, are equity investments and come dead last in the order of who gets paid from the carcass of an insolvent company.

Milbourne argues that when U.S. Steel bought Stelco in October 2007, it paid more than $1.2 billion in cash for the company's stock and assumed $785 million in debt. It also put $34 million into the pension plans.

While it now claims those amounts, more than $2.2 billion, as a debt, Milbourne argues that in its filings with the U.S. Securities and Exchange Commission, the parent company "characterized the injection of funds into Stelco as a straightforward acquisition of equity."

Rather than a loan, where the company receiving money is left to manage its own affairs, the objectors all argue U.S. Steel sought complete control over Stelco — the control that comes from an equity investment.

In their written submission to the court, the United Steelworkers advance many of the same points and argue allowing U.S. Steel to get its way would harm the entire economy.

"The issues arising in this case are important in the context of the Canadian economy, in which a significant number of Canadian businesses are captive subsidiaries of foreign entities which exert complete control over their Canadian subsidiaries, including in matters relating to their capitalization and finance," the union brief argues.

"Approval of these claims would sanction and encourage parent companies to engage in unilateral, undisclosed, and arbitrary financial engineering involving their captive Canadian subsidiaries for their exclusive benefit and to the extreme prejudice of other stakeholders, including unions, employees, retirees, and the subsidiaries themselves."

The union goes on to argue the amounts the parent company claims as debts were imposed on U.S. Steel Canada in a move "to gain tax efficiency."

U.S. Steel Canada, the union argues, "played no role in the negotiation of the Term Loan. Instead … USS created a structure which financed the acquisition of Stelco with a mix of equity investments and purported debt advances that was determined solely by USS, taking into account only its interests."

The province, which helped Stelco leave creditor protection in 2006 by providing $150 million in pension funding, filed expert reports by financial analysts Brad Hall and John Finnerty of AlixPartners LLC.

Hall concluded the amounts U.S. Steel claims are not debt because "a third party lender in an arm's length transaction would not have provided financing to (U.S. Steel Canada) in the amounts and on the terms as those provided by USS."

Finnerty, after comparing two of U.S. Steel's claims against 15 measures, concluded that in one case, eight of the benchmarks were more consistent with an equity payment than a debt. In the second comparison he found 10 of the markers pointed to equity rather than debt.

U.S. Steel has not yet filed any material directly relating to these arguments. In its initial motion, filed in May, it argued its claims had been recommended by the monitor.

The company also fought, and lost, an argument that objections to its claims should be dealt with in an entirely separate legal process rather than as part of U.S. Steel Canada's restructuring under creditor protection.

In a related development, union lawyers worked through the weekend to assemble documents supporting a motion banning U.S. Steel from moving production of its high value auto steels to American mills and out of Hamilton and Nanticoke.

The company has announced it will move production of 15,000 tons a month out of the Canadian plants to ensure production is closer to American customers. The court appointed monitor has stated the move would cut about 40 per cent of the Hamilton plant's revenue.

In a Youtube video posted to the union website, Local 8782 president Bill Ferguson told members "This is an attempt to devalue our business here," and was completely contrary to the goals of the creditor protection process that seeks "to keep the value in any given enterprise.

"Entering (creditor protection) is an attempt by the company to restructure, so the removal of the tonnage is a cutesy move," he said. "U.S. Steel loves cutesy moves. We're going to be going to court … demanding those 15,000 tons stay here."

Ferguson also acknowledged rumours of coming layoffs moving through the Nanticoke plant, but told members nothing official had been announced as of Friday evening.

 

sarnold@thespec.com

905-526-3496 | @arnoldatTheSpec

 

 

 

‘No More Secret Deals’ for U.S. Steel, Steelworkers Say

TORONTO – A veil of secrecy shrouding the bidding process for U.S. Steel assets in Hamilton and Nanticoke must be lifted immediately to protect the interests of thousands of workers and pensions, the United Steelworkers (USW) says.

“There are 39 potential bidders out there, but U.S. Steel doesn’t want anybody to know anything about it,” said Gary Howe, President of USW Local 1005 in Hamilton.

“This isn’t a private transaction just to benefit U.S. Steel. It’s a bankruptcy protection case, a court process that affects thousands. Those who are directly affected – our community, our members and our pensioners – deserve a fair, open and transparent process. It’s their jobs and their pensions that are at risk,” Howe said.

A court monitor overseeing U.S. Steel Canada’s bankruptcy protection case announced earlier this month that multiple parties have expressed interest in purchasing all or part of the company's Canadian assets.

However, to date the USW and other stakeholders directly affected by the restructuring process have not been allowed to meet with, or to even know the identities of bidders who have expressed an interest in the U.S. Steel assets.

The USW is seeking a court order to gain access to the bidders and to related documents, including the letters of intent submitted by the bidders.

The union also is asking the court to prevent U.S. Steel from exercising undue control and gaining an unfair advantage in the sale and restructuring process.

“We’re saying, ‘no more secret deals.’ We want to meet with the bidders and we want to meet with them immediately,” said Bill Ferguson, President of USW Local 8782 in Nanticoke.

“We’ve been trying to move things forward, but U.S. Steel still is holding up the process,” Ferguson said.

“We’ve seen where the Investment Canada Act and those secret deals got us – lost jobs, plant shutdowns and broken promises on investment and production,” said USW Ontario Director Marty Warren.

“We know there are potential bidders who are looking at U.S. Steel properties and we are hearing concerns that some of these bidders are very frustrated with the process and they might just walk away,” Warren said.

U.S. Steel Canada wants to wait until it has received and assessed final offers for its Canadian assets before providing any bid-related information to the USW and other stakeholders such as non-union workers and pensioners and the provincial government.

By then, “it will be too late for effective and meaningful input” from key stakeholders, the USW says in a letter filed with the chief restructuring officer in the bankruptcy protection case.

“It is inconceivable that the SARP (Sale and Restructuring Process) would prohibit timely discussion about such issues with those very stakeholders,” the letter states.

If the company will not allow meaningful involvement by the USW, the union will ask Superior Court Justice Herman Wilton-Siegel to impose a “stakeholder consultation protocol” to protect the key stakeholders’ interests.

The proposed protocol would require U.S. Steel “to provide complete, unredacted copies of the letters of interest” recently submitted by potential bidders.

The protocol also would allow discussions between stakeholders and potential bidders, ensure stakeholders receive regular updates on the SARP and provide the stakeholders with complete, unredacted copies of bids submitted by potential buyers in the second phase of the SARP.

The USW also is proposing to seek a court order requiring the monitor to seek alternatives to U.S. Steel as the debtor-in-possession (DIP) lender for the company’s Canadian operations during the restructuring process.

U.S. Steel’s position as the DIP lender “skews the sales process in its favour” and “is no longer tenable,” the union’s letter states.

The court-appointed monitor in the bankruptcy protection case should “immediately canvass the market for an alternate DIP loan,” including canvassing parties that have submitted letters of interest as potential bidders for U.S. Steel Canada’s assets.

- 30 -

For further information:

Gary Howe, President, USW Local 1005, 905-531-4078, gary.howe@uswa1005.ca
Bill Ferguson, President, USW Local 8782, 905-537-8782, president@uswa8782.com
Marty Warren, USW Ontario Director, 416-243-8792
Bob Gallagher, USW Communications, 416-544-5966, 416-434-2221, bgallagher@usw.ca

 

 

Judge won’t lift secrecy on U.S. Steel-Canada deal
A judge ruled Wednesday he lacks the authority to lift the secrecy surrounding the controversial U.S. Steel deal with the federal government.

Hamilton Spectator , May 21, 2105

By Steve Arnold

The judge in U.S. Steel Canada's creditor protection case has refused to lift the curtain of secrecy shielding the agreement under which the federal government dropped a lawsuit against the company.

In a decision posted Wednesday morning, Superior Court Justice Herman Wilton-Siegel ruled he lacks the authority to order release of the controversial deal – only the Minister of Industry can do that and he has steadfastly refused.

The city, USSC unionized workers and retirees sought a court order to release details of the argreement as part of an effort to understand company claims in its creditor protection action.

They argued that without complete knowledge of the company's financial affairs, they are at an unfair advantage in trying to protect the rights of workers and retirees in restructuring negotiations.

In his ruling, Wilton-Siegel said he has some sympathy for that argument, but can't help.

"The concern for disclosure expressed by the moving parties that has prompted this motion is reasonable and understandable. As participants in negotiations respecting a restructuring of USSC they seek disclosure of the nature and extent of any current obligations of USS in respect of USSC in order to assess the impact, if any, of restructuring proposals of USSC and any other proposed investors on such undertakings," he wrote.

"In the absences of consent by USS or enforcement proceedings brought by Industry Canada they are unable to obtain such information."

The confidentiality clauses of the Investment Canada Act, he added, "establish a very tight nondisclosure regime in furtherance of the purposes of the legislation."

Under those rules, he wrote, "The court has no authority to override these provisions regardless of its views of the potential benefits of disclosure in the present circumstance."

In 2007, the federal government approved the takeover of Stelco by U.S. Steel in exchange for promises about production and employment levels in Canada.

Within a year of taking over, however, the American company began to break every one of those promises, citing the collapse of world demand for steel. In 2009, the government sued to enforce the original promises but in 2011 it suddenly dropped the case in exchange for more promises.

http://www.thespec.com/news-story/5635176-judge-won-t-lift-secrecy-on-u-s-steel-canada-deal/

 

Ottawa-U.S. Steel deal to remain under wraps, court rules

The Globe and Mail, May 21, 2015
By Greg Keenan

Details of the secret deal that ended prosecution of U.S. Steel Canada Inc. by the federal government will remain confidential, an Ontario Superior Court judge has ruled.

The provisions of the Investment Canada Act “establish a very tight non-disclosure regime,” Justice Herman WiltonSiegel said in rejecting motions by the United Steelworkers union, active and retired salaried employees, and the City of Hamilton that the secret agreement be made public as part of the U.S. Steel Canada creditor-protection process under the Companies’ Creditors Arrangement Act (CCAA).

Industry Canada and U.S. Steel Canada reached the deal to end the prosecution in December, 2011. The federal government had sought to penalize the steel maker and its parent, United States Steel Corp., for failing to meet job and production commitments the company made when it won approval under the Investment Canada Act to take over Stelco Inc. in 2007.

The non-disclosure provisions of the federal legislation apply to both companies and the federal government, Justice Wilton-Siegel ruled and they also leave the enforcement of undertakings up to the federal Industry Minister.

“The court has no authority to override these provisions regardless of its views as to the potential benefits of disclosure in the present circumstances,” he wrote.

Lawyers for the union and the salaried are assessing whether to seek leave to appeal the ruling.

They argued in a hearing last month that not knowing what is in the deal means they are handicapped in negotiations with U.S. Steel, which is the largest creditor of U.S. Steel Canada and has said it may bid to reacquire some or all of the Canadian assets it put into CCAA protection last year.

U.S. Steel Canada was granted CCAA protection last September in what is effectively the second trip through bankruptcy protection for the former Stelco, which was the subject of a long and acrimonious restructuring between 2004 and 2006.

http://www.theglobeandmail.com/report-on-business/international-business/ottawa-us-steel-deal-to-remain-under-wraps-court-rules/article24521580/

 

Secret U.S. Steel deal with Ottawa to stay sealed

CBC News, May 20, 2015

The deal between the Canadian government and U.S. Steel that allowed the steelmaker to renege on its obligation to make steel in Canada ? at plants in Hamilton and Nanticoke in Ontario ? will remain a secret.

An Ontario Superior Court judge ruled that while it is reasonable that the deal be open, for fairness in the bankruptcy protection process, he dismissed an unsealing motion, saying he didn’t have the authority to make that happen. 

Gary Howe, president of Hamilton Local 1005 of the United Steelworkers Union called the decision “a disappointment, but not surprising.”

He also said he believes the only next step for the union would be to “continue on with the CCCA [Canada’s Companies’ Creditors Arrangement Act] charade.”

In their motion heard at the court a month earlier, lawyers for the United Steelworkers said it would be “fairness 101” to force disclosure of the out-of-court settlement reached between the two sides, after the government took legal action against U.S. Steel for not fulfilling its obligations set out when Stelco was purchased in 2007 by U.S. Steel

The plant was idled soon after the purchase, and with pensions hanging in the balance, the federal Industry Department sued in 2009. At issue is the details of why the lawsuit was dropped. Since then, U.S. Steel separated itself on paper from its Canadian operations, referring to them collectively as U.S. Steel Canada (USSC), and filed for bankruptcy under the Canada’s Companies’ Creditors Arrangement Act (CCCA).

The written decision from Judge Herman Wilton-Siegel was dated May 19, 2015, and posted to the bankruptcy case monitor’s website Wednesday morning. He said the “concern” for the union and the City of Hamilton to have all the facts about the steelmaker’s Canadian operations, including any deal with the government, was reasonable and understandable.”

That sympathy was eroded when Wilton-Siegel wrote that the court had “no authority” to override the non-disclosure agreements set out in the Investment Canada Act (ICA), and was forced to dismiss the motion.

Lawyers for the steelworkers union and the City of Hamilton said the details of that settlement were important for upcoming negotiations, bankruptcy creditor dealings or a sale of the plants in Hamilton and Nanticoke ? a fact Wilton-Siegel recognized in his written ruling, but dismissed in his conclusions.

In dismissing their argument, Wilton-Siegel said the decision to disclose puts no weight on what the information is, leaving the union and the city in the dark about what obligations USSC has north of the border.

The judge concluded, “The provisions of the ICA leave the enforcement of undertakings in the hands of the minister, to be initiated at his discretion … The court has no authority to override these provisions regardless of its views as to the potential benefits of disclosure in the present circumstances.”

http://www.cbc.ca/news/canada/hamilton/news/secret-u-s-steel-deal-with-ottawa-to-stay-sealed-1.3080491

 

 

Court Ruling Validates Overhaul of Discredited Investment Canada Act

 

MEDIA RELEASE

 

TORONTO, 20 May 2015 – The need to overhaul the discredited Investment Canada Act has been reconfirmed by a court ruling that keeps Canadian families and communities in the dark about a secret deal between the federal government and U.S. Steel.

 

“This decision further underscores how this legislation has been abused by successive Liberal and Conservative governments to benefit foreign multinationals at the expense of Canadian families and communities,” said Ken Neumann, National Director of the United Steelworkers (USW).

 

“The judge in this case confirmed that it is reasonable and potentially beneficial for Canadian workers and pensioners to have access to details of the secret deal between the government and U.S. Steel,” Neumann noted.

 

“However, the judge’s hands are tied because the act allows the government and foreign investors to keep the public in the dark about these secret deals. It’s time to overhaul this legislation to defend the rights and interests of Canadian workers and communities.”

 

Canada’s Conservative government struck a secret deal with U.S. Steel in 2011. The government then dropped its legal challenge of U.S. Steel's broken commitments – made under the Investment Canada Act – on production and employment levels at its operations in Hamilton and Nanticoke.

 

As part of the U.S. Steel bankruptcy protection case now underway, the USW petitioned the Ontario Superior Court to unseal the 2011 secret deal.

 

The USW argued it is crucial that details of the secret deal be provided to key stakeholders in the bankruptcy protection case, particularly the thousands of pensioners and workers whose pensions and jobs are in limbo. The City of Hamilton made the same request.

 

The union and the city told the court they "require disclosure of the settlement agreement at this time to be able to participate meaningfully and effectively in the (bankruptcy protection) negotiations and discussions that are currently underway."

 

In his ruling released yesterday, Superior Court Justice Herman Wilton-Siegel stated the union’s request “is reasonable and understandable.”

 

However, the judge said he cannot override Investment Canada Act provisions, particularly since the federal government and U.S. Steel insist on keeping the deal secret.

 

“The court has no authority to override these provisions regardless of its views as to the potential benefits of disclosure in the present circumstances,” the judge said.

 

“This is another condemnation of Conservative and Liberal governments that have used the Investment Canada Act to benefit foreign corporations while treating Canadian pensioners, workers and their families with contempt,” said Marty Warren, the USW’s Ontario Director.

 

“This legislation is supposed to guarantee a ‘net benefit’ to Canada when foreign corporations take over our natural resources and industries. In reality, there is a net disregard for Canadian jobs, workers and communities, while foreign corporations get the benefits,” Warren said.

 

"It’s clear – to everyone except the federal government and U.S. Steel – that our members, our pensioners and our community deserve to know the details of this secret deal,” said Gary Howe, President of USW Local 1005, representing employees at U.S. Steel's Hamilton operations.

 

"We don't trust U.S. Steel or this government to do what's best for us and for our community and that distrust has been reinforced once again.”

 

“It’s outrageous that the federal government is content to preserve legislation that so blatantly favours foreign multinationals while treating Canadian workers and communities with contempt,” said Bill Ferguson, President of USW Local 8782, representing employees at U.S. Steel's Nanticoke operations.

 

- 30 -

 

For further information:

 

Gary Howe, President, USW Local 1005, 905-531-4078, gary.howe@uswa1005.ca

Bill Ferguson, President, USW Local 8782, 905-537-8782, president@uswa8782.com
Ken Neumann, USW National Director, 416-544-5951

Marty Warren, USW Ontario Director, 416-243-8792

Ken Rosenberg, Counsel to USW, 416-646-4304, ken.rosenberg@paliareroland.com
Bob Gallagher, USW Communications, 416-544-5966, 416-434-2221,
bgallagher@usw.ca

 

 

Union leader promises to help end lockout; MANA workers have been on picket line for almost two years

The Hamilton Spectator, May 21, 2015

Union leader Marty Warren is promising action to get Hamilton steelworkers back on the job after nearly two years on the picket line.

The Ontario director of the United Steel Workers said Wednesday he will be on the telephone Thursday morning in an effort to restart negotiations at the city’s idled Max Aicher North America plant.

The Industrial Drive mill, once owned by U.S. Steel Canada, has been idle since July 2013 after workers were locked out to back company demands for wage and benefit cuts.

Warren told a rally outside the plant Wednesday he intends to get talks restarted and bring the bitter dispute to an end.

“We have to find a way to get back to the bargaining table and find a solution here.”

The MANA plant is a unit of a German steel company. It came to Hamilton amid great fanfare in 2010 as a sign of a revival of the industry, taking over two idled former Stelco plant with promises of 100 jobs to start with a quick ramp-up to at least double that number.

The Ontario government backed the company’s move with a $9-million repayable investment.

From the beginning, however, the company was plagued with supply problems that meant periodic layoffs for workers. That was followed by a lockout when they rejected company offers of contracts that included up to $10 an hour in wage and benefits cuts. Under that proposal, wages at the plant would fall to between $18.70 and $25.26 compared to $27 to $35.

Although the plant employed about 100 workers initially, only about 25 remain on the picket line today. Many have retired or drifted away to other jobs as the confrontation drags on.

“This dispute has kind of gone off most people’s radar,” said Gary Howe, president of Local 1005 of the United Steel Workers.

“This has been a nightmare ever since Max Aicher bought the place.”

Despite the lengthy lockout, however, company spokesperson Stephen McArthur said the plant is producing and shipping steel produced by a small corps of replacement workers.

“Our production is climbing every week, we are climbing into hundreds of tonnes of product,” the Hamilton lawyer said. “We were inching ahead but now we’re moving in feet.”

McArthur said about 25 replacement workers are employed in the plant and more help will be needed as business improves.

“We made them a couple of really good offers but they rejected them both,” he said of the unionized workers.

The presence of those replacement workers - scabs in union parlance - is a major irritant for MPP Paul Miller. He argues their use should be banned in Ontario as a way of urging companies to settle labour disputes.

“Strikes don’t last nearly as long if companies can’t operate their plants.”

 

 

 

 

 

 

 

U.S. Steel to record $400M-$450M expense for Serbian plant sale

By Pittsburgh Tribune-Review

Monday, January 30, 2012

 

U.S. Steel Corp. said today it plans to record a charge of $400 million to $450 million in the January-March quarter to reflect the planned sale of its plant in Serbia.

The steelmaker expects to sell its plant for a "nominal purchase price" to the Republic of Serbia, which wants to avoid a closure which would have resulted in layoffs of 5,400 workers. The Balkan nation and the Pittsburgh-based company plan to close the transaction on Tuesday. Serbian officials said last week they expect to buy the plant for $1.

The charge mostly reflects an expected loss on the sale of the facility, which U.S. Steel acquired in late 2003, includes a charge of $50 million to account for cumulative currency translation losses.

A Wall Street analyst estimated the company was losing at least $75 million a year on the Serbian steel plant.

 

U.S. Steel to sell Serbian plant back for $1, report says

By Pittsburgh Tribune-Review

Friday, January 27, 2012

 

U.S. Steel will sell its plant in Serbia back to that nation's government for $1, eight years after it acquired the plant, according to a report by Bloomberg News.

U.S. Steel will leave no debt behind and will sign the sale agreement on Jan. 31, Prime Minister Mirko Cvetkovic said today, speaking to reporters in Belgrade. A spokeswoman for U.S. Steel didn't immediately return an e-mail seeking comment.

The Serbian unit acquired by Pittsburgh-based U.S. Steel from Serbia for about $23 million in a deal completed in September 2003. U.S. Steel said at the time the plant could produce 2.2 million metric tons of steel annually. The plant is producing 1 million tons, Deputy Finance Minister Dusan Nikezic told reporters today, Bloomberg News said.

"We will start looking for a new strategic partner" for the plant on Feb. 1, Cvetkovic said. The government is trying to find a "suitable buyer" and will keep the plant's production level unchanged, he said.

"The existing owners had a loss of around $132 million," he said.

U.S. Steel CEO John Surma said on an Oct. 25 conference call that the company was not satisfied with its "poor" financial results in Serbia and was "evaluating all options to improve our situation."



Walkom: Stephen Harper’s old-age pension cuts unnecessary

January 27, 2012-The Toronto Star

Thomas Walkom

 

A puzzled audience of tycoons meeting in Davos, Switzerland, found themselves privy to Prime Minister Stephen Harper’s gratuitous plan to lop chunks from Canada’s Old Age Security system, writes Tom Walkom.

Jean-christophe Bott/AP

 

Typically, Prime Minister Stephen Harper chose somewhere far away to reveal the next stage of his not-exactly-hidden agenda.

Four years ago, he used an international summit in Peru to signal his brief flirtation with Keynesian economic stimulus. This week, a puzzled audience of tycoons meeting in Davos, Switzerland, found themselves privy to Harper’s gratuitous plan to lop chunks from Canada’s Old Age Security system.

Along with the Canada Pension Plan (which Harper says he will not cut), Old Age Security is the major source of income for most Canadians 65 and over. These days, the average OAS pension payout is a little over $500 a month.

Along with a sister program for the ultra-poor, it is credited with lifting thousands of seniors from lives of execrable poverty.

Old-age pensions have always presented a conundrum to rock-ribbed right-wingers. Like many who grew up in the era when Britain’s cost-cutting Prime Minister Margaret Thatcher served as a conservative icon, Harper has little patience for social programs.

His view, expressed over the years in various writings, is that Ottawa should focus on crime and defence (“prisons and armed men” as Friedrich Engels once put it), leaving charity, family, the free market and perhaps the provinces to take care of all else.

However, old-age pensions are popular among older people, many of whom vote Conservative. Former prime minister Brian Mulroney found that out when he tried to gut Old Age Security in the 1980s. In the end, he was forced to compromise.

Tellingly, Harper didn’t mention old-age pension cuts at all during last year’s election campaign.

In Davos, the Prime Minister said his cuts won’t affect current pensioners. Exactly what else he has in mind is unclear.

There is some suggestion he will raise the minimum age, now 65, at which people become eligible for full Old Age Security payments. But he also could de-link these payments from inflation, or lower the family income threshold (now about $69,000) at which they begin to be clawed back.

What is clear from his speech in Davos is that he doesn’t need to do anything.

As the Prime Minister correctly pointed out, Canada is no Greece. Government debt levels, as a percentage of gross domestic product, are low; the federal deficit is being whittled back.

There is no fiscal crisis in this country.

True, the government predicts that the cost of pensions for the elderly, now about $35.6 billion, will triple by 2030. That sounds dire. In fact it means that the pension bill will grow by about 5.6 per cent a year during the period

And when baby boomers start to die off, as they will from about 2020, spending on the elderly will start to decelerate on its own.

What the times do present, however, is political opportunity. The standard conservative critique of Europe, which Harper echoed in Davos, is that social programs have bankrupted the continent. The case of the apocryphal Greek hairdresser able to retire on state pension at 53 is invariably raised.

In fact, the European debt crisis is far more complex. Spain and Ireland, which do not offer generous social programs, are in trouble. Germany, which does, is not.

Arguably, the real root cause of the crisis was the decision by countries with vastly different economies to use a common currency, the euro — a decision that encouraged too much public and private borrowing during the good times and makes repayment now near impossible.

Nonetheless, the myth of pensioner excess provides an easy talking point for those anxious to cut social spending in Canada. The euro may be the true villain of the piece. But the story of the slothful Greek hairdresser is easier to understand.

Thomas Walkom's column appears Wednesday, Thursday and Saturday.

 

Chicago’s JMC taking over Lakeside Steel in $57.8m deal

Sunny Freeman
January 25, 2012
 

TORONTO Lakeside Steel Inc. said Wednesday that it has agreed to be acquired by a Chicago-based steelmaker in a friendly deal that values the pipe and tube maker at about $57.8 million.

JMC Steel Group Inc. and Lakeside have worked out a definitive agreement under which the American company is to acquire all of Ontario-based Lakeside’s shares at 29.8 cents apiece.

That is a more than 300 per cent premium to the share price on Dec. 15, the last day of trading before Lakeside announced the two were in negotiations.

The steelmaker’s shares rose 25 per cent to about 27.5 cents Wednesday after the announcement of the definitive agreement, still well below the offer price.

JMC, which already has some locations in Canada, is a large producer of tubular steel products.

The deal comes as a number of pipeline companies seek approval to build vast networks that can transport massive quantities of oil and gas in order to support growing demand for oilsands crude and other sources of energy.

“This strategic acquisition will dramatically increase our capabilities and presence in the energy pipe market,” said Barry Zekelman, executive chairperson at JMC.

“The energy pipe market is a very large market and has significant growth potential. Lakeside Steel is a solid platform for JMC Steel Group Inc. to grow and expand in this area.”

Lakeside had been one of the few remaining publicly-traded Canadian-owned steelmakers. It has recently been setting up factories in the southern United States where labour costs are cheaper and many customers are located.

“Lakeside’s manufacturing capabilities, including the new heat treat and finishing operations in Alabama, are a great complement to our existing pipe business,” said Frank Riddick, JMC’s chief executive officer.

“We are excited about the synergies generated by this acquisition and look forward to leveraging our combined strengths in the market.”

The deal, subject to court approval and other customary conditions, is expected to close in the second quarter of 2012.

Negotiations with the purchaser, whom Lakeside did not name until Wednesday, appeared to hit a snag with the announcement Jan. 10 that the potential buyer had lowered its original offer by 25 per cent.

Under the deal, JMC has also agreed to provide Lakeside with a secured loan of up to $50 million.

However, if the deal falls through under certain circumstances, such as if Lakeside’s board changed its recommendation, the company would be required to immediately repay the loan. JMC also has the option to match any superior proposal and a termination fee is required in some circumstances.

The takeover has the support of one of Lakeside’s biggest shareholders, Jaguar Financial Corp., as well as all of the company’s directors and officers.

Jaguar Financial, a merchant bank headed by Vic Alboini, is the largest shareholder in Lakeside with a nearly nine per cent stake, while Alboini, a Hamilton native and investment banker, personally holds more than three per cent of the company.

Alboini bought into Lakeside Steel in 2006, a year after Stelco sold off its former tube mill in Welland. In 2009, Lakeside was granted intervener status by the Federal Court of Canada in the Harper government’s lawsuit against U.S. Steel for breaking production and employment promises given in exchange for approval to buy Stelco.

Lakeside said at the time it wanted a court-ordered sale of Stelco, claiming it wanted to repatriate a Canadian industrial icon, as well as to shore up its own supplies of steel. Lakeside said it had institutional backers for a Stelco purchase but never identified them.

The Canadian Press

Thousands turn out for London rally to support locked-out Caterpillar employees

January 21, 2012

Liam Casey

 

The anti-government and anticorporate sentiment was palpable throughout the London, Ont. rally Saturday, with many waving signs that read, “Harper: stop corporate greed.”

Liam Casey/Toronto Star

 

LONDON, ONT — A crowd of more than 10,000 descended upon this city’s Victoria Park to support local workers who have been locked out of their jobs since the new year. They came from all over, from Timmins, Sudbury, and Pennsylvania in scores of buses. They came to protest corporate greed and Stephen Harper.

The prime minister didn’t come, although he was invited.

“We need you down here to support Canadian workers,” yelled London Mayor Joe Fontana. “Get your ass down here!”

At issue is a three-week-old lockout at Electro-Motive Canada, a subsidiary of Caterpillar. The company locked out 425 Canadian Auto Workers Local 27 employees when the collective agreement expired on Jan. 1, citing the union’s negotiating flip-flops as the reason for the labour stoppage.

Workers became outraged over the company’s last offer in late December, which they said included wage reductions by as much as 50 per cent for some jobs, and the elimination of pensions, benefits and holidays.

So the union voted to strike, but would work under their old agreement as negotiations continued. The company said no.

Jeremy Beyea, who took a break from the picket line to join the rally, said the workers’ resolve is strong.

“There is no going back now,” Beyea said. “We’re digging in, here for the long haul.”

Beyea said the community has supported those locked out with food, drink and clothing. His family has also provided support, both moral and financial. But some of his co-workers are struggling.

“Some have lost their homes already and some relationships have already broken down,” Beyea said. “It’s been tough.”

The anti-government and anticorporate sentiment was palpable throughout the park, many waving signs that read, “Harper: stop corporate greed.” Bob Scott, union chair in the negotiations with Electro-Motive, said the union will hold a hard line.

“Caterpillar, you want a fight, you got one,” Scott yelled. “You pissed off the wrong membership here.”

The vitriol continued from the country’s union heavyweights.

“If the government doesn’t step in, Canada will become a low-paid workforce,” Ken Lewenza, president of Canadian Auto Workers, told the Star before the rally. “We need to protect the middle class if we want a more equal society.”

Equality has been the klaxon call for the occupy movement, which mixed easily with the workers in the crowd. Occupiers have set up tents on the picket line in support.

“Caterpillar is the poster child for corporate greed — we can now put a face to the 1 per cent,” said Sid Ryan, president of the Ontario Federation of Labour. “Let’s link the occupy movement with the labour movement.”

Ryan focused on hallmarks of the occupy movement by comparing Caterpillar executives with its workers. The crowd roared “Shame!” at every suggestion of corporate greed.

Meanwhile, at the back of the throng, where the speeches couldn’t be heard, some workers wanted solutions, not just talk of it.

“We need governments that make proper trade agreements, especially now with these large multinational companies,” said Angus MacDonald, with an Oakville union. “Otherwise these companies can pit workers in places like Mexico against workers in Canada.”

Labour leaders fear settling with Caterpillar would set a dangerous precedent for workers around the world. That’s why Gene Elk came from Pittsburgh.

“I’m here because we’re worried that this is a race to the bottom of the wage scale,” said Elk, who’s a member of United Electrical. “If Caterpillar is successful, General Electric might do the same in the U.S.”

 

Ottawa favours foreign businesses over Canadian employees

Published On Mon Jan 16 2012
 

Locked-out workers at the Electro-Motive facility in London, Ont. U.S.-owned Caterpillar, Electro-Motive's parent company, wants to cut wages in half.

DAVE CHIDLEY/THE CANADIAN PRESS

Image
By Linda McQuaigColumnist
 

Hundreds of shivering factory workers locked out of their plant by manufacturing giant Caterpillar in London, Ont., might well draw some warm comfort from — of all things — the sayings of Newt Gingrich.

Of course, the conservative Republican presidential contender is no friend of labour or social justice; he recently proposed that poor children be schooled in the ways of free enterprise by being hired to clean school washrooms.

Nonetheless, Gingrich, one of the stars of the Republican freak show, is desperate to defeat front-runner Mitt Romney. With the mitts off, Gingrich is denouncing Romney’s background as a Wall Street corporate raider, accusing him of practising a form of capitalism where “you basically take out all the money, leaving behind the workers.”

The multi-millionaire Romney showed his empathy for working people by noting, in a discussion about private health care, that “I like being able to fire people who provide services” and insisting that comments about the rich having too much money should be confined to “quiet rooms.”

All this has unleashed an unexpected and fierce debate about the brutality of unbridled capitalism — a debate the Republican establishment is scrambling to sweep back into the quiet rooms as quickly as possible.

Here in Canada, Stephen Harper has tried to head off a similar debate, dismissing the relevance of Occupy Wall Street on the grounds that “we have a very different situation here than the United States.”

In fact, under the Harper government, the slightly milder Canadian version of capitalism is rapidly giving way to a more virulent U.S.-style variant, with even greater wealth concentration and fewer protections for working people.

Indeed, Gingrich’s depiction of a capitalism where “you basically take out all the money, leaving behind the workers” seems like a perfect description of what’s going on in London, where the highly profitable U.S.-owned Caterpillar is demanding its Canadian workforce accept a 50-per-cent wage cut. When the workers declined this take-it-or-leave-it offer, they were locked out on New Year’s Eve.

If this isn’t ruthless, heartless capitalism — enough to make even Newt’s blood boil — it’s hard to imagine what is. Yet, as the 500 London workers have bundled up in the cold, the Harper government refuses to get involved, sitting silently on the sidelines as Caterpillar brings its notorious anti-union fervour to Canada.

In fact, the Harper government is involved, having played a key role in bringing about this disaster for the London workers by approving the sale of the company, Electro-Motive Diesel, to foreign-owned Caterpillar in 2010, after supposedly investigating whether the deal was in Canada’s interests.

The Canadian Auto Workers, which represents the locked out workers, believes Caterpillar purchased the plant with the intention of gaining technology and market share and then moving operations south.

The Harper government also approved a foreign takeover by another notorious union-busting company, mining giant Rio Tinto, which has now locked out 800 workers in Alma, Que.

The Canadian Labour Congress is demanding that Ottawa strengthen its foreign takeover laws to make the secretive review process more open, with public hearings in affected communities and publication of the conditions imposed — if any — on foreign owners.

Ironically, the Harper government has complained forcefully about “foreign” interference from outside environmentalists protesting a proposed pipeline across the Rockies. But when it comes to foreign companies stripping Canadian workers of half their wages and then moving operations out of the country, the government hasn’t a negative word to say.

Harper is of course staunchly pro-capitalist, and has aggressively lowered corporate tax rates, while refusing to link lower taxes to investment or job creation.

But his anti-union stance, evident in disputes at Air Canada and the post office last summer, has been particularly provocative. He seems determined to turn Canada into an anti-union paradise — prompting the Ontario Federation of Labour to call for a mass rally at the Caterpillar plant in London this Saturday.

As the PM gears up for his coming battle against federal public sector unions, he will no doubt draw inspiration from Mitt Romney’s stirring words: “I like to be able to fire people who provide services.”

Linda McQuaig’s column appears monthly. lmcquaig@sympatico.ca

 

 

$77.5 million takeover bid for Lakeside Steel

December 20, 2011

WELLAND, Ont. - Steel pipe and tubing maker Lakeside Steel Inc. (TSXV:LS) says it has received a $77.5-million takeover bid from an unnamed buyer, more than four times its market price before the offer was made.

The Welland, Ont.-based company said Tuesday it has a non-binding letter of intent from the prospective buyer, but the deal won’t be finalized until the unnamed company finishes its due diligence on Lakeside, which has to be completed by Jan. 9.

Trading in Lakeside shares had been halted for several days and on resumption they rocketed up more than 300 per cent, gaining 23 cents to 30 cents on the TSX Venture Exchange — though remaining well below the price of the 40 cent per share offer.

Lakeside makes steel pipes and tubing used in the oil and gas industry. It has factories in Welland, Texas and Alabama. Lakeside is headed by Vic Alboini, a Hamilton native and investment banker, who bought into the company shortly after the former Stelco hived off the tube mill.

If the prospective purchaser is not Canadian, and the deal goes through, it will continue a years-long trend that has seen virtually all major Canadian steel companies swept up by foreign firms: Hamilton-based Stelco was bought by U.S. Steel in 2007, Dofasco was purchased by ArcelorMittal in 2006, Algoma Steel was purchased by India’s Essar Group in 2007 and SSAB Swedish Steel AB bought Ipsco in 2008.

Due to the emergence of the bid, Lakeside says it will cancel both a loan and an associated private placement of its stock announced last month.

Lakeside has struggled in recent months, in November posting a $7.6-million second-quarter loss — reversing a $1.2-million profit in the year-earlier period — as it suffered from low margins due to numerous factors, including foreign imports and higher costs. Revenue was down 28.1 per cent to $47.8 million.

The company, which counts the U.S. oil and gas industry as a major customer, has been expanding in the southern United States to bring down its costs and deal with the impact of volatility in the value of the two countries’ dollars.

Lakeside had also previously expressed some interest in buying some of U.S. Steel’s former Stelco assets in Hamilton, if the U.S. firm had been forced to sell them by a lawsuit launched by the federal government.

Ottawa alleged that U.S. Steel broke promises it made to keep jobs and maintain production levels when it bought Hamilton-based Stelco in 2007.

The two sides settled the matter earlier this month, with U.S. Steel Corp. promising to keep making steel in Canada for at least another four years and to make major capital investments at its Canadian mills.

The Canadian Press and the Hamilton Spectator

 

Ottawa settles lawsuit with U.S. Steel

 
US Steel Hamilton. U.S. Steel's Hamilton plant will continue operating until at least 2015 under a new deal struck between the American company and the federal government. Hamilton Spectator file photoSource: Hamilton Spectator file photo

Steve Arnold
 

December 13, 2011
 

Canada has settled its bitter three-year lawsuit against U.S. Steel for new investment of $50 million in its Hamilton and Lake Erie plants.

Opposition politicians and workers were outraged by a deal they say contains no specifics on employment or production in Canada and offers nothing to workers harmed by the company’s failure to keep its original promises.

In a surprise announcement Monday afternoon, Industry Minister Christian Paradis said he was dropping the suit.

“Recently U.S. Steel approached me with a proposal for new and enhanced undertakings. After extensive negotiations a settlement has been reached that demonstrates U.S. Steel’s sustained commitment to operating in Canada,” Paradis said in a news release. “U.S. Steel’s new commitments, many of which run to 2015, will provide benefits that in all likelihood would not have been obtained through the court process.”

Those new promises include making capital investments of “at least” $50 million in Canadian operations by December 2015. That’s in addition to earlier promises of $200 million by Oct. 31, 2012. The company also agreed to donate $3 million to “community and educational programs” in Hamilton and Nanticoke.

In an emailed statement, the company said it is pleased with the settlement.

“We are pleased to have resolved amicably this unfortunate dispute with the Government of Canada. The resolution reflects our ongoing and long-term interest in doing business in Canada. We now turn our full attention to producing and selling steel products in Canada consistently with our core values of workplace safety and environmental stewardship.

“We intend to be valued corporate citizens in Canada.”

Leaders of the United Steel Workers say they were “blindsided” by the deal, even though they have intervener status in the action to seek back wages its members would have earned under the company’s original promise to employ an average of 3,105 workers for three years after purchasing Stelco.

“We didn’t know any of this was going to happen and yet we’re the ones affected by their failure to live up to their promises,” said Rolf Gerstenberger, president of Local 1005, which represents workers in Hamilton. “Where’s our redress now? Our members were unjustly laid off and they should be made whole.”

In an emailed statement, Bill Ferguson, president of Nanticoke’s Local 8782, said it was “incomprehensible” for the government to drop the case without ensuring workers got some kind of compensation.

“We are shocked that our government has cut this secret deal, without even the decency of consulting those who are most affected,” he added. “Our communities and our working families — particularly those whose jobs have disappeared — have been abandoned by U.S. Steel, and now our own government.”

Ken Neumann, Canadian director of USW, was also angry the government settled for so little.

“This is a complete abdication of the government’s responsibility to Canadian workers,” he said. “It’s just outrageous that we have no commitment to jobs now.”

Local MPs Wayne Marston and Chris Charlton, both of the NDP, said they were troubled by utter lack of detail in the settlement announcement.

“The government is dropping this lawsuit in exchange for more promises after taking the company to court for not keeping its promises in the first place,” Charlton said. “For all we know this just allows the company to fatten the calf for three years and then sell it.”

Marston noted that after idling its Canadian plants, the company continued to service customers here from American factories, and there’s nothing in this settlement to ensure that doesn’t happen again.

“If we see another downturn, then we could see that work transferred to the U.S. again,” he said. “The Hamilton and Lake Erie plants are still very vulnerable. This sounds like a very raw deal that raises more questions than it answers.”

David Sweet, Hamilton’s lone voice on the government benches, defended the deal as an “extraordinary” achievement that ensures steel production in Hamilton through the next three years.

“By agreeing to this (U.S. Steel) has indicated that they are here for the long term,” he said. “Agreeing to invest that kind of money sends a very positive signal that they are here for the long term.”

Hamilton Mayor Bob Bratina also welcomed the settlement as a positive sign for the city’s industrial core.

“It’s a reaffirmation that the industrial sector of Hamilton is alive and well,” he said. “It shows the company sees its Hamilton plant as something to be invested in instead of dismantled and sold for scrap.”

Canada launched its suit in 2009 after the company broke employment and production promises given in 2007 when it bought Stelco. Within a year of that purchase, the plants were effectively shut down in response to the worldwide recession that destroyed demand for steel. It was the first time the government took legal action against a company for breaking promises under the Investment Canada Act.

 

U.S. Steel defeated again

 

Steve Arnold
The Hamilton Spectator

November 25, 2011
 

U.S. Steel has suffered another legal defeat in its ongoing battle with the federal government.

The Supreme Court of Canada has dismissed the company's application for leave to appeal lower court verdicts declaring the Investment Canada Act constitutional. As usual, the court gave no reasons for its decision.

Thursday's ruling is just the latest chapter in an almost three-year dispute over the company's failure to keep employment and production promises it made to Canada in 2007 in exchange for approval to buy Stelco.

The decision was released the same day a Hamilton MP tabled a private member's bill in the House of Commons asking that the veil of secrecy around the government-company deal be torn away.

Paula Turtle, a lawyer acting for the United Steelworkers union, said the high court's decision may finally clear the path for a hearing on the real issue in the case.

“We're hoping to get a hearing on substantive issue early in the New Year,” she said.

“This decision pretty much puts to an end the preliminary issues that have been thrown up by the company.”

Holding that hearing, she said, is long overdue.

“The union has been encouraging the government to move this case along since it started,” she said. “The union celebrates every decision that moves us closer to a hearing on the real issue.”

While the court action was started by then-industry minister Tony Clement in 2009, the case has not dealt with the main issue — hearings so far have dealt with company efforts to have the Investment Canada Act declared unconstitutional and to oppose intervener applications by the United Steelworkers and Welland-based Lakeside Steel.

When U.S. Steel was allowed to buy Stelco, it agreed to employ an average of 3,105 workers and produce more than 13 million tons of steel for three years. That period ended Oct. 31, 2010. Starting in March 2009, however, the company shut down most of its Canadian operations, claiming demand for steel had collapsed. It also locked out workers in Hamilton and Nanticoke to enforce its demands for radical changes in its pension plans. During those months, it continued to serve its Canadian customers with steel from its American plants.

The company has never denied breaking its promises, but says the agreement allowed it to make cuts to meet changes in market conditions. U.S. Steel has argued instead that the Investment Canada Act infringed on its Charter rights by exposing executives to the threat of jail terms if court-ordered fines were not paid. It also argued Clement hadn't given a reason for rejecting claims it couldn't meet its promises.

Those arguments have been rejected by the Federal Court of Canada and the Federal Court of Appeal. They ruled the threat of jail wasn't part of the Investment Canada action — that penalty would result from contempt of court charges if the company were to refuse to pay fines.

The government is seeking financial penalties of $10,000 a day, retroactive to Nov. 1, 2008, in addition to forcing the company to meet its jobs and production promises for three years from whenever a final verdict is issued. Lakeside Steel wants a forced sale of the former Stelco plants while the union wants $44 million in back wages.

In a related development Thursday, Hamilton Mountain MP Chris Charlton tabled a private member's bill in Parliament calling on the federal government to publish the complete details of the deal in which U.S. Steel was allowed to buy Stelco.

“I hope that, with this, we can get access to this agreement that was so significant for Hamilton,” she said in an interview. “I also hope it will mean we don't have any more such agreements signed behind closed doors.”

While some details of the deal have become public through court records, Charlton said the public deserves to know much more about how the Harper government decided letting Stelco be sold to an American firm provided a “net benefit” for Canada.

She also wants the government to make available all of the correspondence between Clement and the company about enforcement of the agreement.

“Even the government is acknowledging now that this deal hasn't worked,” she said. “This sale has had a significant negative impact not just on Hamilton steelworkers but also on retirees and the entire community.”

The real issue, she said, is the ability of voters to hold government accountable for decisions — accountability the company has tried to avoid by tying the case up with endless appeals for more than two years.

“If they can tie this up in the courts for years, then they can avoid these questions of accountability,” Charlton said. “We are not going to let up on this because our community deserves better.”

Private member bills very rarely become law, but they can be used to sign public attention on particular issues.

sarnold@thespec.com

 

April 19, 2011 - http://embassymag.ca

embassymag.ca

A review of the Investment Canada Act is necessary

 

Prime Minister Stephen Harper finally admitted in Toronto on March 30 what many had begun to suspect: His government has no plan to review the Investment Canada Act. No clarifications of the "net benefit" test. No plan to add transparency to the decision-making process.

Mr. Harper had promised a review during the APEC summit in Japan in November, days after the federal government blocked BHP Billiton's $39-billion effort to take over Potash Corp. That hugely controversial decision was seen as largely political, and raised eyebrows in business and government circles around the world.

Of course, Potash was the second foreign takeover attempt rebuffed by the Harper government. The first was two years earlier, when it stopped an American company from buying satellite producer MacDonald Dettwiler and Associates. Before that, no other federal government had ever stopped the takeover or merger of a Canadian company by a foreign entity.

A review of the Investment Canada Act had been highly anticipated by foreign investors and governments—as well as the Canadian public, which has become increasingly anxious about such business dealings after Inco, Falconbridge and Stelco were taken over and jobs were subsequently cut and plants closed.

The hope was that a review would lay out the rules and criteria the federal government uses to decide whether a bid can go ahead—and move to make the conditions that are attached to such a purchase, such as the maintaining of certain employment levels, more public.

Now, it appears, Mr. Harper has flip-flopped. It's not clear why, since the prime minister was reportedly in favour of such a review not too long ago. Perhaps he wanted to keep some wiggle room for the next time a politically-sensitive bid comes along. After all, it is generally accepted that the thought of losing seats in Saskatchewan was as much a factor in the Potash decision as anything else.

At the same time, Mr. Harper's own ideology runs along the theme of government not interfering in the market—which is why Mr. Harper has moved over the years to increase the threshold that will instigate a mandatory review from $300 million to $1 billion.

On the other hand, it's entirely possible Mr. Harper doesn't want to get drawn into what would undoubtedly be a politically-charged fight—one that could draw in the provinces and some of the country's largest companies.

However, none of these are very good reasons. The number of reviewable takeovers and mergers is increasing and they are becoming more important to the Canadian economy—and hence, more politically sensitive. The proposed merger of the companies that own the London and Toronto stock exchanges is a direct example.

Unless addressed, continuing uncertainty will contribute to the perceptibly growing unease among many Canadians when it comes to foreign takeovers and mergers. It will also cause some companies to think twice about entering the market—and leave Canada open to reciprocal treatment from other countries.

The benefits of a review of the Investment Canada Act far outweigh the potential—and entirely political—drawbacks.

 

Late labour leader and activist honoured

 
Peter Leibovitch. A well-known Hamilton labour leader and activist who died suddenly last year has been honoured with an anti-racism award named after the first leader of the Co-operative Commonwealth Federation. Hamilton Spectator file photo

Daniel Nolan
 

March 22, 2011
 

TORONTO A well-known Hamilton labour leader and activist who died suddenly last year has been honoured with an anti-racism award named after the first leader of the Co-operative Commonwealth Federation (CCF).

Peter Leibovitch was posthumously given the J.S. Woodsworth Award Monday night by New Democratic Party leader Andrea Horwath at a reception at Queen’s Park. The CCF is the forerunner of the NDP.

The J.S. Woodsworth Award, founded by former Ontario NDP leader Howard Hampton in 1996, is presented to an individual or an organization who has made contributions towards eliminating racial discrimination.

It is handed out by the NDP leader on the United Nations International Day for the Elimination of Racial Discrimination. The day was initiated by the UN to mark the Sharpeville massacres in South Africa in 1960.

Leibovitch died in September of 2010 from a rare and vicious form of leukemia. He was 59.

He spent more than 20 years as a leader of the United Steelworkers local at Lake Erie, but he worked on causes such as organizing a union for Hamilton taxi drivers, a home for Palestinian refugees and opposing the Iraq war. Three months before his death, he helped organize a rally against Israel and its boarding of ships bound for the Gaza Strip.

“I was really proud to give him this honour,” said Horwath, who had Leibovitch as her campaign manager for her first run at city council in 1997. “Peter was passionate about justice and he was passionate about anti-racism. He was honest and he would fight for a just cause until he won.”

The award was accepted by Leibovitch’s granddaughter, Gayla, 15, of Toronto. She is the daughter of Leibovitch’s son Jacob, 39. Other family members on hand included son Joseph, 37, his wife, Shirley, and their two children, Cohen, 3, and year-old Adeira. Liebovitch had five sons and a stepdaughter.

“We’re really honoured and humbled,” said Jacob Leibovitch. “It’s funny because he was never one to look for recognition, so it’s kind of an odd feeling when he gets recognized like this. But, I think everybody kind of felt closer to him tonight and it just seemed like a natural award for him to get, given the work he had done.”

Jacob Leibovitch is now the executive director of the Ontario Taxi Workers Union, which his father was working on. It was certified just a few weeks ago and represents 1,000 cab drivers. He now meets cabbies who have high praise for his father.

dnolan@thespec.com

 

U.S. Steel's Surma total compensation jumps in 2010

Date: Thursday, March 17, 2011, 12:59pm EDT

United States Steel Chairman and CEO John P. Surma.

Citing the company’s improvement within a challenging economic environment, the United States Steel Corp. Board of Directors increased the total compensation of Chairman and CEO John Surma in 2010 by more than three times what it was in 2009, according to U.S. Steel's proxy statement filed with the Securities and Exchange Commission.

The bulk of the increase is by reinstating long-term incentives, which Surma declined in 2009. His base salary at $1.1 million remained unchanged from 2009 levels, and his total compensation was $12.2 million in 2010, up from $3.6 million in 2009.

“Although, Mr. Surma’s compensation increased in 2010, the increase was a direct result of the fact that he was among the lowest paid CEOs in our peer group of companies for 2009,” the proxy stated. “The fact that he received no long-term incentives in 2009, at his request (and the Committee’s agreement), was the largest contributor to his comparatively low 2009 compensation.”

In 2008, Surma had base salary of $1.2 million and total compensation of $14 million.

Though U.S. Steel (NYSE: X) reported a net loss of $482 million last year, that was an improvement over a net loss of $1.4 billion in 2009. Sales were up 57 percent in 2010 to $17.4 billion.

The board noted the company’s policy of aligning executive pay with company performance as well as aligning compensation with long-term corporate performance and shareholders with stock requirements.

Other executives named in the 2010 proxy were:

Like Surma, the base salary for Haggerty and Goodish were the same as 2009. Garraux’s base salary was up 10 percent, and Babcoke was named to his current position last year.

The integrated steelmaker is hosting its annual meeting of shareholders April 26 in downtown Pittsburgh

 

U.S. Steel investing in Lorain, Leipsic steel plants; adding 160 jobs over the next few years

Published: Tuesday, February 08, 2011, 11:47 AM     Updated: Tuesday, February 08, 2011, 5:59 PM
 By Robert Schoenberger, The Plain Dealer
 
USSteelLorain.jpgCranes move pipes at U.S. Steel's Tubular Products Plant in Lorain. U.S. Steel is expanding that plant, adding 80 jobs over the next few years.

CLEVELAND, Ohio -- U.S. Steel Corp. is expanding its Lorain steel tube plant to make pipes for natural gas companies and expanding a Leipsic plant to make steel for automakers.

The company said last year that it was considering the two projects but declined to commit to them at the time. In December, it confirmed the Leipsic project and on Monday, the state announced $200,000 in grants to help fund the Lorain project.

U.S. Steel spokeswoman Erin DePietro declined to say how big the Lorain project would be. The state grant listed it as a $94 million project that would create 80 jobs and retain another 508. But that is only for one potential phase of the project. Last year, then-Governor Ted Strickland said the Lorain project could hit $250 million in investments.

The need for the expansion came from two factors -- the ongoing development of themassive Marcellus Shale natural gas find and a series of import tariffs place on Chinese steel pipelines in 2009. Last year, DePietro said the tariffs gave U.S. Steel more confidence in its ability to profitably produce pipes for the Macellus find.

The Marcellus Shale deposit is a massive natural gas find stretching from West Virginia to New York. Most of the geological formation is in eastern Ohio and western Pennsylvania. Pennsylvania State University geosciences professor Terry Engelder has estimated that the field could hold more than 500 trillion cubic feet of natural gas. In 2009, the country used 23 billion cubic feet of gas.

A drilling boom has been going on in the Marcellus region since 2008.

Environmentalists have criticized the development of the shale because drillers use a process called fracking, injecting fluid into underground structures to fracture rock formations, releasing gas trapped there. The Sierra Club and other groups have said the process has polluted ground water in some gas-producing regions. The drilling industry says the process is safe.

DePietro said the drilling boom has created demand for more specialty steel tubing in the region, and the new investments in Lorain will make that plant better suited to meeting that demand.

The Leipsic project, south of Toledo, is an expansion of U.S. Steel's Pro-Tec joint venture with Japan's Kobe Steel. In December, the companies said that project would cost $400 million and add 80 full-time jobs upon completion in 2012.

Pro-Tec makes specialized, high-strength steel for automakers. With federal fuel economy regulations getting more stringent over the next few years, most automakers have said they'll do whatever they can to shed weight in vehicles. Using small amounts of high-strength steel can mean using less traditional steel.  

 

Pared Clairton project speeds ahead

By Joe Napsha
PITTSBURGH TRIBUNE-REVIEW

Saturday, February 5, 2011

 

U.S. Steel Corp. said Friday that a $500 million plan to cut pollution at its Clairton plant is on track with construction of a coke oven battery and two quenching towers that will enable it to meet air quality standards earlier than expected.

"This solution is a really good thing for both parties," CEO John Surma said of the project at the largest coke-producing plant in North America, with an annual capacity of 4 million tons.

"Five hundred million dollars is the largest investment in the company in 50 years. We had to swallow hard on this one," Surma said.

Construction of the new "C" battery, which will replace some 60-year-old batteries, is scheduled to be finished in December 2012 and to be in operation by January 2013, Surma said during a tour of the plant on the Monongahela River with U.S. Rep. Timothy Murphy, R-Upper St. Clair, chairman of the Congressional Steel Caucus.

In August, U.S. Steel reached a revised agreement with the Allegheny County Health Department to reduce pollution at the plant. It changed a plan announced in June 2007 that would have cost $1.1 billion and called for construction of two new coke oven batteries and the rehabilitation of other older batteries.

The batteries bake coal into coke, removing impurities so it can be used in steelmaking.

The Pittsburgh-based steelmaker broke ground on the project in October 2008 but pulled the plug in April 2009 when the recession slammed the steel industry, cutting demand for coke. While the plan was on hold, the company revised the project.

"The new plan is a big improvement," said Joseph Osborne, legal director for the Group Against Smog and Pollution, a Pittsburgh-based environmental group. It should make the air quality in the Clairton-Liberty Borough area meet air pollution standards by a 2015 deadline, Osborne said.

The group considered the initial plan inadequate, and it considered petitioning the Environmental Protection Agency to reject it, Osborne said.

The health department is taking public comments on a draft permit to allow the steelmaker to build the new battery and two new quenching towers that use water to cool, or "quench," hot coke baked in ovens.

The new towers are expected to reduce emissions by about 77 percent compared to existing quenching towers, said health department spokesman Guillermo Cole. The comment period ends Feb. 28, he said.

The new coke oven battery will have 84 ovens, compared to 192 ovens in the current battery, which will reduce emissions, said Lisa Roudabush, general manager of U.S. Steel's Mon Valley Works. The new towers will be about double the size of existing ones and will do a better job of "cleaning" steam of particulate matter — to 10 grams per ton of coke from 50 grams per ton of coke.

The altered plan scrapped the building of one new coke battery and added construction of the two new towers. It is expected to decrease particulate emissions by at least 320 tons, or 70 percent more than what had been required in a 2008 agreement with U.S. Steel, health department Director Bruce Dixon said.

The reductions are expected by December 2013, which was about 20 months earlier than the original attainment date. With those changes, the health department is predicting the Clairton-Liberty area will attain the required national air quality standard by August 2015.

Surma did not rule out construction of a "D" battery as originally envisioned. He said that will depend on business conditions. Coal and coke are two of the biggest expenses in steelmaking, he noted.

"Stay tuned," he told a group of steelworkers.

One of those steelworkers pleased with the progress and the investment was Justin Ellsworth of North Huntingdon, who has six years at the plant.

"It's keeping good-paying jobs here in the Mon Valley. That $500 million is staying here," Ellsworth said.


 

U.S. Steel Threatens Workers Who Are Thinking About Calling In Sick On Super Bowl Sunday

 

EPA rejects permit for U.S. Steel's Granite City Works
BY Jeffrey Tomich STLToday.com Posted: Friday, February 4, 2011

The Environmental Protection Agency has rejected parts of an air permit issued by Illinois regulators for U.S. Steel Corp.'s Granite City Works and sent the permit back to the state.

The Illinois EPA issued the permit in September 2009. The Interdisciplinary Environmental Clinic at Washington University School of Law filed an appeal with the EPA a month later on behalf of American Bottom Conservancy, a Metro East-based environmental group.

The group challenged the permit on dozens of points, including that it excluded the impact of a newly built coke plant and failed to state how the emissions from the plant would be monitored under the federal Clean Air Act.

"Consistent monitoring is important to ensure that U.S. Steel-Granite City Works is not emitting toxic air pollutants at an unsafe level," Kathy Andria, executive director of American Bottom Conservancy, said Thursday in a statement.

EPA Administrator Lisa Jackson issued the 46-page order on Monday.

Illinois EPA spokeswoman Maggie Carson said the agency plans to reissue the permit but could not discuss specific issues.

A spokesperson for U.S. Steel couldn't be reached late Thursday.

 

Union workers protest foreign investment

By SHARON LEM, QMI AGENCY-The Simcoe Reformer

TORONTO --Thousands of union workers from across Ontario are going to protest Prime Minister Stephen Harper's foreign investment policies in Hamilton, Ont., on Saturday.

The mass demonstration --organized by the Ontario Federation of Labour (OFL) -- will also condemn the actions of foreign-own companies for cutting pensions, benefits and wages of the previous Canadian-owned companies they purchase and take over, particularly U.S. Steel, which bought Hamilton-based Stelco in August 2007.

OFL president Sid Ryan said Saturday's protest, slated to start 1 p.m. at Hamilton City Hall, is expected to be one of the largest labour demonstrations since Harper was elected in 2006.

The rally may even become larger than the 1995 Days of Action which protested former Ontario premier Mike Harris' cuts to welfare rates and social programs to finance corporate tax cuts.

"We' re on the cusp of a federal election and we'll be sending Harper a signal to take to Conservatives across the country, we're fighting to say no to foreign acquisitions of Canadian companies without protection of Canadian workers," Ryan said.

"Workers have been beaten down for too long and workers are frightened of losing their jobs. We want a different future for ourselves and for our children."

He said union workers and supporters are outraged by U.S. Steel's failure to live up to its employment obligations and steel production targets, which was part of the original deal made with the Canadian government to secure the purchase of Stelco.

Ryan said after slashing the workforce to 2,200 employees from 3,100, U.S. Steel locked out the 900 remaining workers on Nov. 7. It's the first lock out in the union's 65-year history.

U.S. Steel is at odds over de-indexing pension plans of 9,000 retirees and blocking new employees from a guaranteed pension income when they retire.

Ryan said Harper's government sold Stelco with the assurance Canada would see a "net benefit" under the Investment Canada Act.

"There's no net benefit to Canadians here if they don't protect and preserve jobs, pensions and benefits," he said, adding the battle played out with U.S. Steel is happening in communities across Canada.

"Our message to Prime Minister Harper is simple: Put Canadian jobs and retirement first, or the Canadian electorate will show you the door."

U.S. Steel sued over health plan

By Brian Bowling
PITTSBURGH TRIBUNE-REVIEW

Saturday, January 29, 2011

A former employee claims in a federal lawsuit that U.S. Steel Corp., Downtown, misled him into enrolling in a Medicare program when he should have remained on the company's health plan.

William E. Brown claims the government program paid about $750,000 in medical claims that the company's health plan should have covered. He also claims the company pressured other employees to enroll in Medicare and file thousands of claims that should have been handled by the company plan.

U.S. Steel has made no effort to reimburse Medicare, the lawsuit says.

Brown is suing under a statute that allows private citizens to pursue claims on behalf of the United States. If he wins, he would receive up to 30 percent of the damages awarded to the government.

The lawsuit was filed in May. The case was sealed until this week to give the government time to decide whether it wanted to intervene. The government filed notice Tuesday that it won't become involved.

U.S. Steel spokeswoman Courtney Boone declined to comment.

Brown says in the lawsuit that he was injured in a work-related motor vehicle accident in 1981. He was advised by a company official in 1986 to take a disability retirement because U.S. Steel was closing its plant in Duquesne.

In 1992, company officials told him to enroll in Medicare Part B coverage because he no longer would be covered by the company's health plan, the lawsuit says. The Social Security Administration determined in 2005 that Brown had been improperly enrolled in Medicare and that the program had paid about $750,000 in claims that should have been paid by U.S. Steel's health plan, the lawsuit says

 

Thousands expected at rally

 
Lake Erie workers block entrance. Locked out workers block the entrance/exit to U.S. Steel Canada's Lake Erie Works at the shift change. Hamilton Spectator file photo Source: Hamilton Spectator file photo

Steve Arnold
 

January 26, 2011
 

Workers from across Ontario are to jam Hamilton’s core on Saturday to denounce both U.S. Steel and the foreign investment policies of the Harper government.

The campaign, dubbed The People Versus U.S. Steel, condemns the company for locking out 900 Hamilton workers to back demands for pension concessions, and the Conservative government for allowing the company to purchase the former Stelco.

The Ontario Federation of Labour is expecting 60 busloads of protesters — as many as 3,000 — as well as individuals, smaller groups, local supporters, and strong turnout from the 900 active members and 9,000 retirees of Local 1005 of the United Steelworkers.

If those numbers turn out, it will be the largest labour demonstration since the 1995 Days of Action that protested the Mike Harris provincial government’s slashing of welfare rates and other social programs to finance corporate tax cuts. Estimates of the crowd on Hamilton streets for that march ranged up to 100,000.

Saturday’s program will begin at city hall with entertainment at 12:30 p.m., followed at 1 by speeches from Mary Long, president of the Hamilton and District Labour Council; Mayor Bob Bratina; Local 1005 president Rolf Gerstenberger; Sid Ryan, president of the Ontario Federation of Labour; Leo Gerard, international president of the Steelworkers; Canadian Labour Congress president Ken Georgetti; and Hamilton Mountain MP Chris Charlton. Demonstrators will then march along Main Street, down John Street, along King Street to Bay Street, and back to city hall.

Gerstenberger casts the confrontation as a battle for retirement security.

“Canadians deserve decent pensions so we’re fighting for the security of everyone,” he said. “People all across the country are being faced with this fight.”

U.S. Steel, which bought the former Stelco in 2007, locked out its Hamilton Workers Nov. 7 to back its demand that the current defined benefit pension plan be closed to new employees in favour of a defined contribution scheme. It also wants an end to indexing payments for 9,000 current retirees and widows.

U.S. Steel’s demands have struck a chord with the labour movement across the country. In a joint letter of support for the demonstration, the USW’s Gerard and Canadian director Ken Neumann wrote “It is beyond shameful for U.S. Steel to attack the living standards of some of the most vulnerable members of our community. Many of these retirees and widows already struggle to live on meagre incomes, but U.S. Steel wants to punish them by taking away the indexing of their modest pensions.”

The OFL’s Ryan said the Hamilton confrontation with U.S. Steel is much more than a local dispute over terms of a collective agreement — it’s a fight to protect the gains of decades of negotiations and strikes. It’s also a condemnation of the federal government that allows Canadian companies to be taken over by foreign firms.

He was especially harsh on the federal government for deciding the takeover of Stelco would provide a “net benefit” for Canada.

“Surely a net benefit would be the preservation of jobs and preservation of pensions,” Ryan said. “We don’t see a net benefit to workers because of this deal.”

Gerstenberger also sees the local confrontation as just one more skirmish in a fight for the future of Canadian industry.

“We can’t let U.S. Steel come here, shut us down twice in two years, and still say that’s a net benefit to Canada,” he said. “We hope that U.S. Steel recognizes that we want to produce steel. If they don’t, then they should leave the scene.

“Having a steel industry is not a minor issue for a country,” he added. “There’s a movement out there now asking (does) a country need control of its steel industry? Is a steel industry something that’s important to a country?”

Georgetti from the Canadian Labour Congress backs that view. In a letter of support for the demonstration, he wrote “U.S. Steel’s lockout of your members is just the latest example of corporate and government failure of workers and their communities.”

What’s needed, he added, is a complete overhaul of Canada’s foreign investment regulations.

Hamilton police so far have maintained a restrained attitude toward the lockout and that will continue Saturday, said media relations officer Sergeant Terri-Lynn Collings. Police will be on scene mainly for traffic and crowd control.

“We have been working with the organizers on an operation plan,” she said. “All of us are working together to make this a safe event. We want to ensure can everyone can attend this and know it’s a safe event.”

 

U.S. Steel sees markets improving after 4Q loss

By Sandy Shore AP Business Writer | Posted: Wednesday, January 26, 2011 12:00 am

U.S. Steel Corp. officials see signs that business will improve this year, with rising steel prices and more orders across its customer base. The turnaround likely will hinge on the pace of the global economic recovery.

U.S. Steel is "cautiously optimistic" the economy will grow stronger in the first quarter. It expects more shipments and higher production volume to outpace rising raw material costs.

On Tuesday, U.S. Steel reported a smaller fourth-quarter loss after it sold assets and cut spending on facility repair and maintenance.

The Pittsburgh company lost $249 million, or $1.74 per share, in October through December. That compares with a loss of $267 million, or $1.86 per share a year earlier. Revenue increased 28 percent to $4.3 billion from a year ago.

U.S. Steel said market conditions were "soft" during most of the last three months of 2010. The price it got for steel products dropped from the third quarter, when it lost $51 million.

At the same time the cost of sales, which includes raw materials, jumped 23 percent.

The results missed Wall Street expectations for a loss of $1.11 per share on revenue of $4.2 billion.

Chairman and CEO John Surma said steel prices began to rise late in the fourth quarter and should be reflected in U.S. Steel's earnings in the first half of 2011.

"We remain cautiously optimistic that global economic conditions will continue to improve in the first quarter," he said.

The message is similar from other steelmakers. AK Steel Holding Corp. and Steel Dynamics expect business to improve in the first quarter as the economy improves. On Tuesday, AK Steel posted a loss of $98.3 million. A year ago it earned $39.8 million. Steel Dynamics on Monday reported net income of $7.8 million, down from a profit of nearly $26.7 million in the same quarter a year ago.

In the fourth quarter, U.S. Steel said the loss narrowed in its flat-rolled segment to $156 million, but its European business had a wider loss of $39 million. The company's tubular business reported a profit of $96 million.

The flat-rolled segment improved because of reduced spending for facility repair and maintenance, partially caused by the substantial completion of repairs in the third quarter at the company's Gary Works facility.

Flat-rolled steel is used in appliances, cars and construction. Tubular steel is used to make pipes.

All U.S. Steel operations in Northwest Indiana are part of the flat-rolled segment.

In the region, U.S. Steel operates Gary Works, the largest manufacturing complex in the company's system. Gary Works includes the steelmaking, finishing and coke production facilities in Gary, and the Midwest Plant in Portage and East Chicago Tin, which are finishing facilities. U.S. Steel also is part of two joint ventures in Portage: Feralloy Processing Co. and Chrome Deposit Corp.

For the full year, U.S. Steel Corp. lost $482 million, or $3.36 per share, compared with a loss of $1.4 billion, or $10.42 per share, in 2009.

Analysts expected U.S. Steel to log a weak fourth quarter but some were disappointed with the muted first-quarter expectations.

"There's a mismatch in the revenue and cost streams where their prices are not realized in real time and their costs are," Steel Market Intelligence analyst Michelle Applebaum said. "Prices are up a lot but they don't see any of that until the second quarter."

Argus Research analyst Bill Selesky said the fourth quarter typically is weaker than others for most steel companies because customer demand falls at the end of the year.

The main challenges will be to offset higher raw materials costs by passing along higher prices to customers, he said.

U.S. Steel cuts loss, but costs won't ‘go away'

Steve Arnold - The Hamilton Spectator
 

January 26, 2011
 

U.S. Steel has shaved more than $900 million off its 2009 loss, helped by the sale of two closed steel mills in Hamilton.

In a fourth-quarter and year-end statement, the company reported a net loss of $482 million in 2010, down from more than $1.4 billion in 2009.

For the last part of 2010, the loss narrowed only slightly — to $249 million from $267 million for the last three months of 2009.

Company chairman John Surma said keeping the Hamilton plant idle cost U.S. Steel about $40 million in the fourth quarter, chiefly in utility costs to keep its steelmaking equipment ready to go back into service.

“We'll try to keep that down, but it's hard to make it go away,” he said.

“Unfortunately, we've had some experience with this in 2009 and 2010.”

For eight months, ending in April last year, the company kept its Lake Erie Works in Nanticoke shut to win the pension concessions it is now demanding in Hamilton.

Ending those idling costs won't happen, however, as long as members of Local 1005 of the United Steel Workers continue to resist the company's demands for radical changes to pension plans, including closing the existing defined benefit plan to new hires in favour of a defined contribution savings plan and ending index payments for current retirees.

“I don't know of a single plant in North America that still has a defined benefit pension plan,” he said in response to a question. “There's no other plant in North America with pension indexing, either.”

Surma also refused to say if there are active negotiations toward ending the Hamilton dispute.

“We'd rather be gentlemen and keep that information between us and them,” he said.

While the Hamilton plant is cold and silent, except for its coke-making battery, Surma and finance chief Gretchen Haggerty predicted an active quarter is ahead for the company with plants running at about 72 per cent capacity.

Surma said the company's overall performance for both the fourth quarter and the year was better than 2009 but still not good enough, largely because of soft demand and sagging prices.

The lower overall loss was attributed to reduced maintenance spending on its plants and the sale of some assets, including the former Stelco bar and bloom mills in Hamilton.

The Hamilton plants were sold to Max Aicher North America, a branch of a German steel company. MANA intends to bring them back into production. Along with some transportation assets in Alabama, they brought a pretax net gain of $21 million to the company.

“Our results are by no means great, but they are a significant improvement,” he said. “We were able to restart some of our facilities and get our people back to work.”

U.S. Steel's flat rolled segment, which includes the operations in Hamilton, reported better results because of reduced maintenance, offset by lower spot market prices for steel.

 

$253m bolsters Dofasco's future

 
DOFASCO INVESTMENT. Sandra Pupatello, Minister of of Economic Development and Trade, and Juergen Schachler, president and CEO of ArcelorMittal Dafasco, had plenty to smile about. Cathie Coward/The Hamilton Spectator Source: The Hamilton Spectator

Steve Arnold
 

January 19, 2011
 

ArcelorMittal is making a second major investment in its Hamilton operations.

The company announced Tuesday it will spend $153 million over the next two years to replace its aging finishing operations with modern new lines.

The investment follows on the heels of a $100-million project finished last year to overhaul its blast furnace operations.

Ontario Economic Development Minister Sandra Pupatello gave both projects a boost by announcing government support of $43.6 million — $13.6 million for the completed project and $30 million for the finishing lines.

In announcing the latest project, company president Juergen Schachler said the investment that secures the future for current employees likely would not have been made in Hamilton without the government cash.

“This is a large investment that will make us one of the top steel producers in the world,” Schachler said.

“For our employees it will mean more skills, more training and a safer job for the future. Without this investment from the government, this likely would not have happened.”
 

Schachler also called the provincial gifts a statement of faith in the future of manufacturing.

“This is a great day for our company and the city,” he said. “It is also a tremendous testament that you believe in manufacturing and the future.”

Yesterday's announcement was the first acknowledgment public money is going into the primary project, and an unveiling of the scale and scope of the finishing renewal.

Pupatello welcomed ArcelorMittal's commitment to the Hamilton plant, saying it eased a worry she has been carrying since 2007 when Dofasco went on the auction block.

“We're just delighted this is going to be the crown jewel in the AMD fleet,” she said. “This is the kind of work that AMD could do anywhere, but they've chosen to do it in Hamilton.

“This will help to preserve the jobs that are here,” she added. “Now there are 5,000 families out there who can look to the future with the kind of confidence that comes from having a good job.”

ArcelorMittal Dofasco expects many gains from its new production lines. In its news release, the company said the new galvanizing and Galvalume lines will operate more efficiently, use less fuel and produce a greater range of products than the current facilities, including new advanced high strength steels used in the auto industry.

ArcelorMittal Dofasco is the only Galvalume producer in Canada. The product is a coated steel with twice the rust and corrosion resistance of galvanized steel. It is used primarily in construction.

The work on the primary production side, including the restart of the company's No. 3 blast furnace, will save electricity by using liquid iron in its electric arc furnace to start melting scrap metal. That's expected to save about 20 megawatts of electricity a year, enough to power 20,000 homes. Waste gas will be harnessed and converted to usable energy.

In an earlier election-style speech yesterday to the Hamilton Chamber of Commerce, Pupatello praised the McGuinty government's economic agenda as the right medicine for a province struggling to throw off the last effects of a recession “the likes of which our generation has never seen and hopefully won't see again.”

In the face of those problems, she said, the Liberal government cut taxes, imposed the Harmonized Sales Tax hated by consumers but loved by business, poured money into education initiatives and faced up to its deficit in order to convince business leaders Ontario is a stable place to invest.

“We've had some hard knocks, but we're still in the game,” she said. “The HST alone is the single greatest thing we've done for the economy.”

sarnold@thespec.com

 

The Year 2011 - A Better One for the Steel Industry

Subscribe to the Steel Market Update News RSS Feed Jan / 01 / 2011 - The Year 2011 - A Better One for the Steel Industry

An optimistic look at the flat rolled steel business in 2011-Steel Market Update

 

It is time to look past the trees and see the larger picture. Business is getting better and will continue to do so throughout 2011. Those in the industry have seen the black hole, defeated the naysayers and have survived what will most likely be one of the greatest steel crashes in U.S. history. Congratulations and pats on the backs of each and every one of you out there who survived.

2011 is going to be the year when the steel industry once again prospers. At least that is our opinion. There will be hiccups, volatility will not disappear and the need for our services (and yours) will grow as the year progresses.

The most recent IHS Global Insight/CSM Auto production data is showing a build schedule going into First Quarter 2011 which will be 9.6% higher than Fourth Quarter 2010 and 10.3% higher than First Quarter 2010. The schedules call for 3,201,586 cars and light trucks to be produced during 1Q 2011 vs. the 2,902,670 units produced during 1Q 2010. Using an average of 1.5 tons of steel in each vehicle the extra production equates to approximately 450,000 tons of extra steel needed compared to during 1Q 2011 vs. 1Q 2010.

Service centers have been advising SMU for the past few weeks that their order books and shipping rates have been improving and are “steady” to rising during the month of December which traditionally is a slower month. The one area of concern is those companies who business is tied to residential and commercial construction where they continue to struggle. Even so, one service center owner told SMU this morning, “People are still looking for steel the day before Christmas Eve.” He went on to tell us that in all of his years in the business he has never seen anything like it (business continuing to flow right up to the Holidays).

We spoke with a manufacturer tied to the construction industry who told us their sales in November and so far in December were “very good” in spite of the slow construction markets. Some of the orders were for export but most went to their traditional customer base (who may have finally needed to restock their shelves?). They are scratching their heads but gladly accepting the business.

Our Steel Market Update (SMU) Buyers Sentiment Index has made tremendous gains over the past six weeks finally reaching positive numbers (although just barely). Our expectation is this burst of optimism will continue as we move into the New Year. Our opinion is being reinforced with our SMU Futures Sentiment Index which now stands at +36, a record high.

As the month and the year end, our SMU Price Momentum continues to point to upward movement for flat rolled steel prices as we move into the New Year. ArcelorMittal has made promises to keep prices firm through at least the month of March 2011 at the $700 on hot rolled and $820 base cold rolled and coated. On the surface, this may appear to be putting a “cap” on prices. Based on our sources the number of available spot tons out of AMUSA is negligible and should have minimal to no impact on how the other domestic mills approach the market (our opinion).

SMU is in agreement with steel analyst, Chuck Bradford of Affiliated Research Group who told SMU this morning he expects steel shipments to improve by 5% to as much as 10% this coming year vs. 2010.

So, let’s try to keep despair at bay over the Holidays and we should all come back to work on January 3rd with all cylinders firing.  You can rest assured we will be watching the markets closely on your behalf in the New Year as we have done in the past.

 

US Steel Suit Determines That Workers Are Allowed To Intervene In The Court Case

According to an article in TheSpec.com, "Workers have a right to intervene in court cases that affect their jobs."

The article reported that "A federal court affirmed that right in a new decision crushing US Steel’s efforts to keep workers and another steel firm out of the company’s legal battle with Ottawa.

The decision, dated yesterday and released today, is another defeat for the American steelmaker that scooped up Stelco in 2007.

In getting government approval for that purchase, the company promised to maintained jobs and production in Canada. But within a year the Canadian operation had been shut down and orders were being filled from the company’s American plants.

The federal government sued, the first time it acted under the Investment Canada Act to challenge a foreign investor’s failure to keep promises that a purchase would be a “net benefit” to Canada.

Since being filed, the government suit has been bogged down in procedural challenges by US Steel. The company first challenged the constitutionality of the Investment Canada Act, then it challenged the right of workers and Welland-based Lakeside Steel to intervene in the case.

The government has asked for fines now totalling more than $15 million while Lakeside wants a forced sale of the former Stelco. Workers, represented by the United Steelworkers, support the idea of a sale and also want $44 million in lost wages.

A hearing on the substance of the case could be held in the spring."

 

Court says workers can intervene in US Steel suit

Steve Arnold
 

December 26, 2010
 

Workers have a right to intervene in court cases that affect their jobs.

A federal court affirmed that right in a new decision crushing US Steel’s efforts to keep workers and another steel firm out of the company’s legal battle with Ottawa.

The decision, dated yesterday and released today, is another defeat for the American steelmaker that scooped up Stelco in 2007.

In getting government approval for that purchase, the company promised to maintained jobs and production in Canada. But within a year the Canadian operation had been shut down and orders were being filled from the company’s American plants.

The federal government sued, the first time it acted under the Investment Canada Act to challenge a foreign investor’s failure to keep promises that a purchase would be a “net benefit” to Canada.

Since being filed, the government suit has been bogged down in procedural challenges by US Steel. The company first challenged the constitutionality of the Investment Canada Act, then it challenged the right of workers and Welland-based Lakeside Steel to intervene in the case.

The government has asked for fines now totalling more than $15 million while Lakeside wants a forced sale of the former Stelco. Workers, represented by the United Steelworkers, support the idea of a sale and also want $44 million in lost wages.

A hearing on the substance of the case could be held in the spring.