This page will display current news inside and outside the
plant.
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
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
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
Pittsburgh Business Times - by Malia Spencer
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:
 | Gretchen R. Haggerty, executive vice president and
chief financial officer, with base salary of $555,750 and total compensation
of $4 million. |
| John H. Goodish, executive vice president and chief
operating officer, with base salary of $712,506 and total compensation of
$3.7 million.
Goodish retired at the end 2010. |
| James D. Garraux, general counsel and senior vice
president corporate affairs, with base salary of $494,798 and total
compensation of $3.4 million. |
| George F. Babcoke, senior vice president of European
operations and global operations services, with base salary of $390,500 and
total compensation of $3.2 million. |
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
U.S.
Steel Corp.Cranes 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.
U.S. Steel Corp.'s Ohio investment plans
Lorain Tubular Operations:
Current jobs: 500
Products: Seamless steel pipes ranging from 1.9 inches
to 4.5 inches in diameter or 10.75 inches to 26 inches in diameter.
Capacity: 780,000 tons of steel pipe per year.
Expansion: New heat treatment and finishing facilities
will expand the plant's capacity.
Pro-Tec Coating Co. (A 50-50 joint venture with Japan's Kobe
Steel) :
Current jobs: 230
Products: Hot-dipped galvanized steel sheet, primarily
for use in exterior automotive parts and appliances.
Capacity: 1.2 million tons of steel sheet per year.
Expansion: Addition of a continuous annealing line, a
system for heating and treating sheet steel.
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
Dashiel Bennett
| Feb. 4,
2011, 10:16 AM |
608
| -Business Insider
U.S. Steel sent a memo to its Pennsylvania mill workers this week,
warning them at anyone who misses work on Sunday or Monday "without just
cause ... will be subject to severe disciplinary action."
According to the Pittsburgh Post-Gazette, a union rep responded with
an email (in black and gold fonts) saying that the warning was heavy
handed, and it would be nice if the company were a little more flexible
to its football loving employees.
"I'm concerned that since [Mon Valley
employee relations manager] Preston [Henderson] hails from the Philly
region, he may not be as flexible and that this is just some kind of
Eagles sour grapes being displayed here."
The email also suggests that lost production could be made up at a
better time, and maybe they should also throw a Super Bowl party for the
guys on the swing shift.
Or maybe the world can go without steel for four hours?
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
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.
