More than a year ago, MetalMiner published several articles on the shutdown of Canadian steel mills acquired by US based US Steel. The move to shut down Canadian facilities (at the expense of less efficient US facilities according to some) met with controversy north of the border for a number of reasons. The primary reason centered on provisions of the Canadian Investment Act which, “gives the government the power to oversee foreign investment in the country, according to a recent Reuters article. Specifically the Canadian government can assess whether or not a particular foreign firm’s ownership of a Canadian firm will be a “net benefit to Canada. In this case, the Canadian government named job protection as one of the tenets of the agreement for US Steel to takeover the Stelco operations. When US Steel idled the Hamilton operation, locked out workers from its Lake Erie plant and in total laid off 2100 Canadian workers, while consolidating US operations, the Canadian government and United Steelworkers went into high gear.
US Steel faces a $13.5 – $14.6m fine (depending on your source of information). Looking through the lens of US Steel, “The company has lived up to 29 of 31 commitments it made before the acquisition, including paying off C$700 million of Stelco’s debt, funding the company’s pension plan and spending C$15 million on research, said Michael Barrack, U.S. Steel’s lawyer, according to a Business Week article. And in all fairness, the firm did lay off workers in the US as a response to deteriorating marketing conditions as well throughout much of 2009. But other issues remain.
MetalMiner published a follow-up post just after the Stelco closures in which another Canadian producer, Lakeside Metals, a producer of steel and pipe products for the oil and gas industries sought what is called an intervenor status, “alleging that US Steel failed to uphold both job and production commitments as part of it’s acquisition of the two plants, as we reported earlier. Lakeside has via court documents argued to purchase the Stelco plants as part of a court-ordered sale from US Steel based on its commitment to adhere to collective agreements, defined pension plans and fulfill production and employment undertakings at both plants.
In an interview, Lakeside president Ron Bedard said he was “pleased with the decision but deferred all future comments until the document has been thoroughly reviewed.
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