Will the Canadians Take Over Stelco Operations from US Steel?

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Ferrous Metals, Global Trade

That seems to be the $800m question (perhaps more actually). Some are surely hoping the answer is yes as we heard about via an anonymous email. As we had reported earlier (and received plenty of feedback), many Canadians were (rightfully) angered by the acquisition of two steel Stelco plants by US Steel followed by subsequent shutdowns as US Steel cut capacity to keep supply aligned with sluggish demand. The controversy centered around shut-downs of Canadian plants by their American owners over more inefficient US-based plants. In all fairness to US Steel, ArcelorMittal also shut down a Canadian operation.

Now, Canadian based Lakeside Steel plans to acquire both the Hamilton Steel as well as the Lake Erie Works plant in Nanticoke. Both the United Steelworker’s Union (USW) and Lakeside Steel have filed in Federal Court what is known as intervenor status alleging that US Steel failed to uphold both job and production commitments as part of it’s acquisition of the two plants. The USW supports Lakeside Steel’s move to acquire the plants based on it’s commitment to, respect the collective agreements, support the defined benefit pension plans and fulfill production and employment undertakings at both plants.

It appears as though this acquisition by Lakeside Steel would be a win-win for all parties¦US Steel can rid itself of much negative press and the plants would move back into Canadian hands. Now whether or not Lakeside Steel will be able to keep the plants operating profitably and according to pre-agreed upon labor agreements is another matter altogether. But at least there is some hope.

–Lisa Reisman

Comments (11)

  1. Al says:

    I think what has angered many is the fact that US Steel has shut down its operations in Canada and moved the Canadian orders to Gary,Indiana. For a company that complains about imports, it is doing just that to Canada. It is essentially forcing its customers to now import their steel from the US. If US Steel fails to start up these plants (not just primary operations) there is a real threat that customers will go elsewhere for their steel requirements.
    On a positive note, auto production is ramping up in the 4th quarter in the US and Canada which should undoubtedly be cause to start up normal operations. If US Steel fails to start up all Canadian operations by October, it would seem quite obvious that they have no intentions of abiding by their purchase agreement. Granite City and Great Lakes Works were shut down before the Canadian operations yet have now been opened ahead of them.
    The lack of a labour contract with Lake Erie Works(Nanticoke) may very well be the reason for this. US Steel wants Canadian workers to take cuts to pay ,benefits and pensions while only a year ago US Steel USA were given increased benefits as well as a $6000 signing bonus. This doesn’t look very respectful to the Canadian workers who were willing to extend their present contract for 1 year.As a result, they have been locked out.
    Should US Steel stay on this confrontational path, perhaps it would be best if Lakeside Steel did purchase the company. The Canadian workers would welcome the chance to compete directly with a US Steel that has spurned them. They know that the quality of their steel is superior to that of the now imported steel and so do the customers.
    It is, however, probably in the best interest of everyone for US Steel to settle a contract with Lake Erie Works and open the plant back up. Although primary operation have restarted in Hamilton, secondary operations will not start until Lake Erie is up and running and therby providing hot rolled coils to the Hamilton Works. Hopefully everthing will be worked out in the near future and this downturn and idling can be put into the past and life can go on for the workers at US Steel Canada.

  2. Afraid for my job says:

    The firm’s request for intervener status in the Canadian government’s lawsuit against U.S. Steel is “motivated by private economic interests”
    ————————————————
    Well duuuhhh is,nt that the ”AMERICAN
    WAY” ??? Why is it OK when the US does it but when others do it they whine ?? Typical Americanism .
    Stelco supplied Plate Steel called Skelp [that pipe is made from] to Stelco Welland [Lakeside] and skelp was one of Stelco,s most lucrative and prosperous products made in our ”Plate Mill” . There is a long story behind that Plate mill .That was my Mill , I worked there. The Company put a rumored 180 million into the upgrades and when they eventually had all the bugs out and finally rolling well they closed it and sold it to India for 20 million. Good business eh ? Funny this was just before CCAA. in which alot of money was made by certain people and it ended up in the U.S.A with Stelco finally ending up in US Steel,s hands . Who by the way manufactures PLATE AND PIPE . Hmmmm curious huh ??
    The reaquisition of Hamilton works would be greatly advantageous to Lakeside not to mention Hamilton and the Canadian industry base but especially Lakeside who could make their own skelp and produce pipe cheaper than if they had to buy from GUESS WHO ? US STEEL or other Foreign suppliers . Not to mention how great it would be to see the rebirth of a Canadian industrial icon STELCO supply Canadian Companies and a Canadian Market once again.

    This is just my thoughts and feelings and not those of Local 1005 but as I see it. Mr. Gerstenberger the Local President is absolutely correct in pointing out how hard it is to trust or jump on any bandwagon Vulture lenders or anyone is pushing when we have been lied to and misused so many times . It,s like the puppy that gets hit with the newspaper so many times and then its owner cant figure out why the grown dog refuses to go fetch the newspaper.
    Like I said thats just my take but then again I,m living it .

  3. Anonymous says:

    The Arcelor Mittal plant in Montreal had 1/4 of the workforce of US Steel Canada and was much smaller in a small steel market. US Steel Canada -Lake Erie in particular is one of the most efficient plants in North America, as the USS Lake Erie Works website boasts. Furthermore, the Ontario market is huge and Arcelor Montreal, Quebec really canot be compared to the USS Canada closure. The reality is that this closure is simply due to American protectionism and a desire to use the contract renewal as a tool to take away from the employees of Lake Erie……and Hamilton to follow when their contract expires. Interestingly, it was only a year ago that US Steel USA accepted a new contract which included increased benefits,wages and a $6000 signing bonus! Instead of using Canadian operations as overflow when American operations are going well as well, US Steel should be trying to build a competitive Canadian powerhouse in steel. They have the talent, the land and the expertise to do it.

  4. finally back to work says:

    This is ALL politics.. Plain and simple, it’s election time. Of course USSteel is going to try to open the plants that were first laid off. Why should Great Lakes Works and Granite City Works be shut down first and then started up last? That makes no sense to me. The longer a blast furnace is left cold the more problems they would possibly face.

  5. annonymous says:

    On Hamilton news today I saw the story about the ship that appears to get loaded and then disappear from charted sights only to return again 2 days later. Through the grapevine I was told today there is speculation that USSteel is “importing” american workers into the nanticoke plant to work and taking the iron ore back to the states. Think about it – it’s possible. If all the workers are locked out who is loading the ship and who is keeping the coke ovens going? Someone (government agency) needs to go in and check this out. Is is not beyond the American companies to pull this.

  6. Al says:

    US Steel presently has all foreman/management from the mill and pickling lines working 7 hour days in the plant. The management personel working there also now have pool tables and US Steel has hired a chef to cook for them. It doesn’t look like US Steel is going to fair too well in court either from what I am hearing. Hopefully they lose the plants to Lakeside and never do business in Canada again. They have now become unwelcome by business, workers, and Canadians in general. Amazing how Dofasco( Hamilton) is suddenly swamped with orders! The word is that many companies have refused to purchase steel from US Steel USA and have switched to the competition. It would be nice to hear from US Steel as to how many orders have now been lost or to hear what Canadian companies have moved to Dofasco as a result of the shutdown. US Steel has made a grave strategical error in shutting down their Canadian plants which at the time of shutdown still had plenty of orders.

  7. Al says:

    Correction ….they are working 7 days at a stretch in the plant ( and not going home until the 7 days are done)

  8. packmanus says:

    robber barons. we are just grist in the mill. i know people who are gasping their last breath, about to lose everything over politics. our only saviour, lakeside steel is now targeted by a corporate assasin. callusion and old bedfellows. the us is going to turn canada into a welfare economy. we need more politicians like danny williams. ottawa called him a fool for standing up to the americans, now newfoundland is one of the few HAVE provinces. GROW SOME BALLS!
    ross perot said NAFTA was a bad deal for canada and warned us we will hear the sucking sound in our economy! john turner called free trade the SALE OF CANADA ACT and our politicians laughed!!!! as i write, the news is about a summit to fix the shut-out of canadian business to the us market.
    IT’S DEJA-VU ALL OVER AGAIN.
    DEFINITION OF INSANITY—DOING THE SAME THING OVER AND OVER EXPECTING A DIFFERENT RESULT.

  9. Vike says:

    Like a fellow Stelco employee said just months after the take over of Stelco..now we know why the rest of the world hates americans. I have cancelled my plans to visit the states as have a few of my fellow Canadian workers. The anti american sentiment grows daily in the Hamilton and Norfolk county regions. We just want the yanks to go back to where they came from .

  10. Tess says:

    When will we have to change

    Made In Canada

    to this stamp

    Made In U.S.A.

    Lets face it we’re looing out on Canadian Produced Manufacturing

    Companies can not compete with America. They have to go south inorder to survive. We are loosing Canadian jobs and I don’t have a University degree to see this. When will our government realize what’s happened?

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