Timing of shutdown tied to contract negotiations, union claims
The United Steelworkers are accusing U.S. Steel Canada of shutting down its Hamilton blast furnace as a way to “freeze out” workers on the verge of a labour dispute.
The Pittsburgh-based steel giant made the announcement at the end of September, citing an ongoing slump in the steel industry. The company said the estimated 300 to 400 people affected will be shuffled to other parts of the plant.
However, Rolf Gerstenberger, president of United Steelworkers Local 1005, is suspicious of the timing. The contract covering the company’s 900 workers expired in July. Negotiations started in late May; however, Gerstenberger says they came to an abrupt halt on July 7.
“We were meeting four to five times a week, then in July they said they would get back to us with another proposal,” he said. “That never happened.”
Instead, U.S. Steel asked for a provincial conciliator. The request came a week before the company said it was shutting down its Hamilton blast furnace due to poor market conditions.
“You would like to believe it’s because of the economic crisis,” he said. “But the way things are working out, it’s hard to believe that.”
Pensions are one of the sticking points. There are two issues. First, Gerstenberger said the company is demanding the elimination of a pension plan for all new hires. Instead, they would be opted into a savings plan.
Second, he said U.S. Steel Canada wants to eliminate pension indexing for retirees. The union says this would affect almost 9,000 pensioners. Their pensions are indexed every August based on a formula that factors in cost of living and pension plan returns. Under that formula, a pensioner getting $1,000 a month when indexing started in 1991 now earns $1,366.
Gerstenberger said recent increases in the cost of living, such as hydro and the introduction of the HST, have made it impossible for pensioners to live on less.
“That might not seem like a lot, but if you’re only living on $1,000 a month, that extra $366 would be quite a bit,” he said, noting the inflation index has fluctuated between zero and 3.1 per cent over the past 20 years. In 2009, it was pegged at 0.08 per cent.
In September, Hamilton city councillors passed a unanimous motion asking U.S. Steel to reverse its position. Councillor Sam Merulla told fellow councillors pension indexing is not a private issue because seniors would have to increasingly rely on city support services.
Gerstenberger said the union is not surprised by the company’s demand.
“It got to that in Lake Erie (U.S. Steel’s Nanticoke, Ontario mill) and Vale Inco,” he said. “They’re all trying to get out of pension obligations.”
Gerstenberger won’t discuss the union’s response or counter-proposal publicly. Meanwhile, he said there are other issues that need to be addressed.
Currently, Steelworkers at the Hamilton mill receive a maximum lifetime benefit coverage of $70,000. Until now, Gerstenberger said the company overlooked situations where extremely ill employees exceeded that limit. He said U.S. Steel wants to put an end to that practice.
“Most people don’t ever use that much,” he said. “These are people who are really sick and run into something not covered by the government.”
Gerstenberger said about 180 workers would be affected.
The other outstanding issue is vacation time. He said the company wants it capped at five weeks, except for current 30-plus year employees already getting seven weeks.
U.S. Steel is not commenting on labour negotiations. The company last shut down the blast furnace in 2008.
