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U.S. Steel Canada workers worried about jobs, pensions

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(Updated)

Almost since arriving in Hamilton seven years ago, U.S. Steel has been operating under a cloud of mistrust and suspicion. From the start, union members said the American giant intended to close down Canadian operations and eliminate a competitor, as quickly as possible. This evening, that possibility is looking more plausible after the company filed for creditor protection, late Tuesday afternoon. Very little is clear about what U.S. Steel intends to do or what the federal government may do in response. The only thing that seems clear at this hour is that both workers and pensioners, have reason to worry.

Local 1005 President Rolf Gerstenberger says U.S. Steel has basically been hiding in the bushes for quite some time: “It’s sort of been in the background for a few months that something was going to happen here.”

It happened — late Tuesday afternoon. U.S. Steel filed for protection from its creditors to begin a major restructuring of its Canadian operations. In an email, company spokesman Trevor Harris said: “We will carry on business as usual while a restructuring solution is developed.”

But he also said pensions and benefits will be targeted, promising only: “To provide current and former employees notice, if and when one or more of these programs or benefits will be altered during the restructuring.”

U.S. Steel required federal approval when it bought Stelco in 2007. It signed an agreement that guaranteed a net benefit to Canadians. In 2011, having failed to meet those obligations, the Conservative government took them to court, and then suddenly dropped the lawsuit, under a cloak of secrecy. That was a shock, says MPP Chris Charlton, considering Ottawa won every preliminary hearing in the case: “And in spite of that — the government just folded up its tent, sold out the workers and the retirees at U.S. Steel, and in fact our entire community, by letting them off the hook.”

Industry Canada will only offer this comment: “Our Government’s thoughts are with the workers and their families during this restructuring process. While this process is ongoing, U.S. Steel has indicated that they have a plan to ensure that salaries, pensions and operations are not affected. The Government of Canada will continue to monitor this situation closely.”

Charlton’s reaction?: “That’s a release that says absolutely nothing.”

Lake Erie union president Bill Ferguson isn’t panicking: “I think the most important message to get out there right now, is that the gates aren’t going to close, tomorrow.”

Ferguson is waiting for the first court session on the company application for creditor protection on October sixth: “That’s the next big milestone. That’s when we’ll find out what they’re actually thinking of doing.”

And whether, perhaps, they’re thinking of leaving the Hamilton waterfront, for good.

Until that court hearing on the sixth, there will be no clear information on current pension liabilities, salaries, wages or benefits for the thousands of employees who work at both Lake Erie, and here in Hamilton. Nor will there be any clear information regarding what stopped Ottawa from pursuing a lawsuit it seemed to be winning in 2011 — for nothing more concrete than further promises from a company that had already fallen short on its obligations.

So how are U.S. Steel workers reacting to the bankruptcy protection? We spoke with a few during this afternoon’s shift change.

“My pension obviously. And what’s going to happen to all the workers here as well.”

“Pensions, and all that. The survivability of the company and the plant and all that.”

“I’ve been through this before a few years ago so we will see how it will take its course and hope it’s all the best. It’s all we can do.”

“I’m a little bit worried. But I’m hopeful everything will be fine.”

Ontario’s Economic Development Minister Brad Duguid is also commenting on U.S. Steel Canada’s move. A $150 million dollar loan from the province is due in 2016. It was provided to U.S Steel to help finance workers’ pensions: We’re in a fiercely competitive global economy and we’re either in the game or out of the game as far as attracting foreign direct investment for companies to come here. We’re number one in North America for foreign direct investment. So that tells me that the aggressive approach is important. At the same time, the investment we’re talking about in U.S. Steel is a loan that was provided eight years ago to save 2,000 jobs that probably would have been gone at that point. So for eight years now, there’s close to 2,000 people, maybe more, who have been working in Ontario, in that industry as a result of that investment. Where that investment lands at the end of the day, because it is a loan, will be determined by the solvency relief approach that’s being taken now so that’s still up in the air. So it’ll be decided through that approach.”

 

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