Merulla: Council Motion Demanding US Steel Bargain in Good Faith

By RTH Staff
Published October 05, 2010

Ward 4 Coucillor Sam Merulla plans to introduce a Council motion calling on US Steel to negotiate in good faith with United Steelworkers Canada Local 1005 and not to close its Hamilton Works Blast Furnace as reported last week.

In an email response to RTH, Merulla pointed out, "both the provincial and federal governments have subsidized US Steel." He added, "It is imperative that all levels of government take stand to insure justice prevails."

Asked whether the City has any authority to make such a motion binding, Merulla responded, "Symbolic or not I, stand against the injustice of the brothers and sisters of Local 1005 in solidarity."

In a recent information update to members, Local 1005 President Rolf Gerstenberger pointed out that US Steel already broke its commitment to the Federal Government that it would maintain at least 3,105 active employees and maintain at least 4.3 million tons of steel production.

Far from remedying the situation, U.S. Steel is now banking the blast furnace and stopping steel production altogether. Our Local finds that U.S. Steel's decision to bank the blast furnace and stop steel production at the very least in contempt of the case before the courts. Furthermore, just as last time when it shut down the blast furnace it said it would not lay off any workers but it did, will it now use its refusal to bargain in good faith with Local 1005 to shut down Hamilton Works completely as it did Lake Erie for nine months?

Gerstenberger calls on the Federal Government to ensure that US Steel bargains in good faith with its employees.

Merulla's full motion reads:

Whereas US steel has been subsidized by the Government of Canada and the Province of Ontario and;

Whereas Local 1005 and US Steel are in the midst of negotiations to protect nearly ten thousand pensioners from the termination of indexed pensions and the well being of the most vulnerable US steel employees and;

Whereas the City of Hamilton has a vested interest in protecting the integrity of Provincial of Ontario labour laws and the principle of negotiating collective agreements in good faith and;

Whereas the demand of steel is increasing based on industry predictions;

Therefore be it resolved that the City of Hamilton reject the "bully tactics" of the Ivory towers of US Steel in Pittsburgh in their attempt to circumvent good faith negotiations as it pertains to the collective agreement between the hard working members and pensioners of Local 1005 and US Steel, and demand good faith negotiations prevail for the collective benefit of the City of Hamilton, Local 1005 and US Steel and demand [not to] shut down the blast furnace immediately.


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By Edward HC Graydon (anonymous) | Posted October 05, 2010 at 13:18:42

The only option is to follow the ideas in principal, outlined in my platform.If every citizen,share holder,pensioner "wins" and we take control of our environment and heath related concerns all while creating 30,000 jobs ,"I say let them go," why stop the possible betterment of our city,unless you want urban sprawl.

Edward Graydon

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By MattM (registered) | Posted October 05, 2010 at 13:47:59

You know, most of the time I feel as if Sam Merulla is the last person I'll cast a ballot for, but then he does something like this and it warms my opinion of him slightly. I don't think this will have much (or any) effect on the situation but it is good to see him actually fighting for his constituents.

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By mrjanitor (registered) | Posted October 05, 2010 at 13:51:29

Full disclosure: I am a US Steel 1005 employee, I started in Dec./09 in the steam plant (CBS in Stelco speak).

It is important to note that US Steel CEO John Surma was appointed in Sept 2010 by Barack Obama to participate in an advisory council to increase US exports around the world. Upon news of this appointment many of us in 1005 knew trouble was ahead for our blast furnace.

Also, contract negotiations with USW 1005 have not been going as planned. USW 1005 has not asked for any changes to the agreement that expired on July 31/2010, a 'stand pat' agreement was all we have been requesting meaning no increase in pay, pension or benefits for union members. This reasonable request is not nearly enough for US Steel to take back to the board of directors. There are 5 major points of contention:

  1. US Steel is not willing to index pensions of retired workers anymore. Since 1990 the Consumer Price Index has gone up 40%. A typical pension for someone who retired from Stelco in 1990 was $1000 a month. He now has lost $400 in buying power. With Cost of Living indexing his pension is currently $1360, it fell a little behind but one could still live off of this. The loss of indexing for the approximately 9000 retired employees will take that money out of Hamilton's economy and put it into US Steel's. Over 10 years this loss of local income will not only crush retirees but crush our economy and social services as well.

  2. US Steel wants to cap (again) lifetime health benefits of retirees and current employees at $70,000. This cap was removed during the last bargaining session with a letter of agreement. It is heartbreaking to sit in the Union hall and hear some of the 200 people who are in danger of losing health benefits. To go through that much money over your lifetime means one has been very sick. The chemical exposures some of the workers have survived is staggering. They got sick by working at the mill now the mill is refusing to live up to the legacy it has left. 1005 will not budge on this item.

  3. New employees will not have a pension but will have instead a savings plan. This will create two different classes of employees, something that a union that is firm about solidarity will not accept. The argument is over Defined Benefit (monthly pension) versus a Defined Contribution (Savings Plan). The lump sum numbers presented to workers look enticing however they will only last 10 years after retirement compared to the same amount a monthly pension pays. Huge amount of money were pulled from the Stelco pension plan when there was a surplus due to the Government of Ontario loosening pension funding laws. The pillaging of the fund has left a deficit of around $850,000,000 that has to be covered to meet pension commitments. US Steel due to special arrangement was allowed to fund a minimal amount of this deficit yearly but must cover the difference by 2016. It is assumed that there will look to bankrupt the Canadian operations before 2016 so they will not have to pay the difference, Ontario taxpayers will. 1005 has presented some creative options in dealing with the deficit and has offered to work with the company on extending the 2016 deadline, US Steel has shown no interest in this.

  4. A reduction in cost of living allowance for current employees. Current COLA top-ups have been increase hourly wages at Stelco anywhere from 30 to 50 cents a year. USS want to reduce that amount to 1/5 of what the contract has now.

  5. The standard reduction in vacation time for long term employees. 5 weeks max versus 7 weeks that 30 year employees currently have.

Also of interest is the article Ryan McGreal reported on today by Jeff Rubin. Rubin states that peak oil will also mean a resurgence for local steel,"Triple-digit oil prices won't only bring back the Winnipeg Jets and the Quebec Nordiques, they'll do something Jim Balsillie could not, they'll bring the Tigers back to Hamilton and the steel industry along with it." Just like Potash production, steel is an important strategic asset for a country to possess. It won't be affordable to ship cheap steel from China anymore.

Also, please realize this, steel is a high tech industry now. Hilton works makes the same amount of steel with 850 workers as it did when it employed over 12,000 workers. How do you think that amazing increase in productivity occurred? Technology. Please don't limit your opinion of steel as a dinosaur, there is much more going on behind the scene then you realize.

Comment edited by mrjanitor on 2010-10-05 12:57:45

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By Jacob (registered) | Posted October 05, 2010 at 14:53:59

Frankly I've never known Sam not to fight for his residents or anyone else that asks for that matter. That's why he is so good @ what he does. Cheers to Sam!

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By Pxtl (registered) - website | Posted October 05, 2010 at 15:02:49

On the "peak oil" argument: I'm getting some stonework done at my house. I found out something interesting: it is far, far cheaper to ship stone from India than to get local stone.

Think about it - stone. The very definition of "dead weight" is still cheaper to ship, even in this economy... and it's not like there's a shortage of quarries in Ontario.

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By Capitalist (anonymous) | Posted October 05, 2010 at 15:29:25


Could you explain why US Steel (Stelco) has been declining in Hamilton while Dofasco has been expanding?

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By mrjanitor (registered) | Posted October 05, 2010 at 16:15:27


Product choice: Stelco made some very poor decisions on what products to drop and what products to focus on. The most famous example is their old tin line. They felt there was no future in tin so they sold the line to Dofasco. The tin market rebounded shortly after the sale and Dofasco has been making a fortune from tin. There was a push as I have seen in many industries to drop low volume high profit products and focus solely on high volume products however with thin profit margins. Another example would be a cold rolling line that they upgraded for about $200,000,000 using components designed for aluminum, not steel. 2 years later that line was sold to an Indian aluminum company for $20,000,000, 10 cents on the dollar. There also used to be a lot of money in selling what is called by-products, mostly from the coke making process. Stelco decided even though it was profitable it was not a core business and stopped marketing by-products. I have been told of many other similar choices such as roll width, coatings etc. that were poor decisions that cost Stelco business. Dofasco management always have an eye to future market conditions, Stelco always seemed to be thinking about what made sense 2 years past.

Investment in new technology and processes: Dofasco has been brilliant in choosing which products to focus on but also what to invest in. They have developed their own world class maintenance system that was so good they were actually trying to sell it to other industries. Maintenance increases equipment life but also increase uptime for production lines, a key way to increase profit.

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By z jones (registered) | Posted October 05, 2010 at 18:25:32

^That's not the answer Capitalist wants! He wants to believe US Steel is doing bad because of the Big Bad Union and not because of bad management.

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By NoBenifits (anonymous) | Posted October 05, 2010 at 19:55:13

Comments with a score below -5 are hidden by default.

You can change or disable this comment score threshold by registering an RTH user account.

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By django (anonymous) | Posted October 05, 2010 at 21:04:00

Capitalist asks a polite question provoking a smart and polite answer from mr janitor. The start to an interesting debate maybe. Z Jones responds with a silly bit of sarcasm he no doubt thought clever. The end to an interesting debate. Z receives 4 upvotes, capitalist 3 downvotes at this point. Here is something wrong with this forum.

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By z jones (registered) | Posted October 05, 2010 at 21:09:19

^Read Capitalist's comments for a while and you'll understand.

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By dsahota (registered) | Posted October 05, 2010 at 21:13:36

It is so frustrating for me to read about people complaining that $70 000 in health benefits isn't enough. Or that their pension hasn't increased enough to meet the cost of living increase.

As a quick note, that's $70,000 in cumulative lifetime benefits. If you ended up with cancer or mesothelioma or some other horrible disease because you were working a cesspool of industrial chemicals, that $70,000 goes pretty quick. As time wears on, that $70,000 buys less and less health care. You also can't compare the working conditions in the healthcare field to the working conditions in a steel factory in 50's and 60's when many of these retirees were working.

After completing 2 university degrees and working as a professional in my area of study (health care), I have zero benefits and zero pension.

I would be absolutely delighted if the company I work for would give me $1000 in health benefits. If the would give me $100 a month when I retire? Awesome!

Well if you think you deserve health benefits and a pension, then start talking to the other people at your employer as there are likely other people who think the same way. You may be able to unionize yourselves and bargain or form an association which can informally negotiate with your employer for the benefits you want.

The steelworkers have their benefits because they (and the generations before them) stood up and were willing to take action in order to win those gains. Don't blame them because you're not willing to stand up for yourself.

Comment edited by dsahota on 2010-10-05 20:14:22

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By NoBenifits (anonymous) | Posted October 05, 2010 at 22:08:04


I never said that I think I deserve anything. The point of my post wasn't to say that I think I'm deserving of anything. The point of my post was to point out that I think anyone who has $70 000 in health benefits and a pension of any kind should feel EXTREMELY lucky. To risk losing one's job by asking for more, especially in times when most people have seen a pay freeze (like health care workers) seems crazy to me.
I'm not blaming anyone for my situation. I'm not sure where you get that notion from. As for their gains, well as to all the jobless former unionized workers, I don't see much of a gain.

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By mrjanitor (registered) | Posted October 05, 2010 at 22:17:43

No Benifits,

Please read my first post, USW 1005 is NOT asking for any gains or asking for anything other than what they currently have. No increases anywhere. Stand pat agreement. US Steel is looking to take all of these things away, 1005 is not asking to get these things as they all already are in the collective agreement. I hope that clears anything up that was fuzzy in my first post.

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By NoBenifits (anonymous) | Posted October 05, 2010 at 22:28:48

Hey MrJanitor,

I realize that you're not asking for anything "more". Even the 5 points of contention seem pretty fare to me relative to what most people get in the work force. In fact, compared to what most people get, even with all 5 points of contention being passed, it seems extremely generous. Honestly, even if those 5 things were passed, trust me, you're very very lucky.
On a side note, the union if fighting for benefits to increase relative to cost of living and inflation increases. Is it safe to assume then that if cost of living decreases and/or we see deflation (quite possible), would the union and workers be okay with the benefits decreasing accordingly?

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By frank (registered) | Posted October 06, 2010 at 10:04:04

First of all it's no benEfits...secondly, I'm sorry that you completed 2 degrees (did they include English classes? :P) and haven't been able to find work with benefits and a pension but that doesn't make other people lucky - it makes you unlucky. There are enough health care positions where pensions and benefits are both applied and it sucks that you didn't find one. Keep looking though some are bound to open up.

70 grand in lifetime healthcare benefits isn't that much especially if you consider that Stelco has been operating for a while and during the time when safety regulations weren't as strict, employed more workers than they do today. Those workers may have been exposed to all kinds of things you will never be exposed to. In fact, it's entirely possible that it's their health issues that exposed the problems associated with whatever they were working with thereby allowing you to live a life where you aren't exposed to it.

I'm in no way a fan of unions because in most cases they're a greedy cash sponge but I find nothing wrong with the agreement they're asking for. Simply because you don't get the same thing doesn't make them the bad guy...

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By realfreeenterpriser (registered) | Posted October 06, 2010 at 11:26:09

It seems to me that many of the negative comments regarding steelworkers' wages/benefits/pensions are based in the "race to the bottom" mentality of dismissing something as "rich" or "gold-plated" simply because it's better than what the writer is receiving. We hear it all the time regarding teachers, civil servants, unionized workers and the list goes on. One working person denigrating what another working person has achieved is precisely what keeps the gap between "rich" and "poor" widening.

Hamilton was built by unionized workers (Local 1005 is the de facto union at Dofasco) fighting to earn enough money to buy houses and cars, put their kids through school, eat out once in a while and have a secure retirement after slugging in filth for much of their lives.

Think about it, what good is a pension that ISN'T indexed to inflation? What good is a job that barely let's you squeak through life? What good is capped healthcare if you've got cancer?

Instead of putting down the conditions enjoyed by working neighbours who float in a slightly better boat, maybe we should be questioning the wisdom of "free" trade with low wage, polluting countries or an income tax system skewed to favour the well-to-do or an education system that is increasingly difficult to access for working people or any of the other systemic devices that help make the poor poorer and the rich richer.

That way, we might actually pull those at the bottom up rather than those in the middle down.

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By Capitalist (anonymous) | Posted October 06, 2010 at 11:36:27


Thanks for defending me.

For the record, I beleive that Stelco's problems stem from BOTH poor management and a militant union.


Thanks for responding. As a member of Local 1005 you are probably the best person here to provide insight into what is going on. However, the question that I should have asked you is this:

Why is it that the Hilton Works plant in Hamilton is performing so poorly while the Lake Erie Works is very successful?

Both are unionized (albeit different locals) and are owned by US Steel/Stelco. From what I understand the Lake Erie plant (built in early 1980s) is very productive. Why does the Hilton Works not display the same level of productivity?

I have a suspicion that the reason US Steel purchased Stelco was to get its hands on Lake Erie. They don't really care much about Hilton Works but may have been pressured into buying it by the government back in 07.

Sorry for all the questions but your insight is useful.

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By NoBenifits (anonymous) | Posted October 06, 2010 at 16:25:50


I'm well aware how to spell benefits, thank you. You'll notice that I spell it correctly in my posts and that how I spell my Screen Name is a personal choice. Telling me how I should spell my name would be like me telling you that you should use an upper case F in your name. To answer your question... Yes, I took university level English. There are several grammatical errors in lots of posts (mine included I'm sure), but I don't see much use in pointing them out as a means to discredit someone. Come on!

It is my opinion that those with benefits are the lucky ones. Roughly 65% of the Canadian work force are without a pension. However, I suppose if you consider that having a pension was part of the reason why some people lost their job, perhaps they are not lucky. Either way, there is no denying the fact that a large majority of the Canadian work force is sans pension.

The exposure to harmful elements argument doesn't hold water. You're right that there are lots of things that some workers will be exposed to that I won't. There are, however, also lots of things that I will be (and have been) exposed to that other workers will never be exposed to (such as potentially deadly viruses and bacteria eg. MRSA, CDiff, H1N1 etc). I don't think that makes my job any better, worse, more deserving or less deserving than anyone else. I'm just pointing out that there are lots of workers who are exposed to lots of things. That is just an example for my situation.

I also never said anything about anyone being a bad guy. There have been several examples of different people completely fabricating things about my posts. Why do you make things up?

I think some people have misinterpreted my post(s). I'm not trying to say that person X shouldn't get something or that I should and other people shouldn't. All I meant to say was that I find it frustrating to hear people complain that their pension and benefits aren't enough when the majority of Canadians would be more than happy to have half of what the person complaining gets.


I agree with what you're saying. Is it then safe to assume that you will agree to pay more tax so that the government can afford to give me a pension and benefits, because right now they can't.

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By frank (registered) | Posted October 07, 2010 at 08:44:14

NoBenifits... Sorry, the armor you're wearing was blinding me...must have missed the correctly spelled "benefits". Anyway, it seems you don't understand what's being done. Either way, they worked for and have something and it shouldn't be taken away especially when US Steel was subsidized by both provincial and federal governments. They're not asking for more, they're saying that what they haven't should NOT be taken away. What you feel holds water and doesn't is inconsequential. The fact remains that what you're exposing yourself to, you're doing with knowledge of both its presence and its treatment...they may not and probably did not have that luxury.

Your posts don't have to SAY that they're the bad guy, they wreak of "I don't get it so why should they". I don't get what they get either, but US Steel is 100% wrong in this case. Like I said, sorry you're so hard done by, but if you feel you should have a pension, like someone said already, form a union. Alternatively, find a job in a unionized workplace, there are lots of them in your field I have 3 family members in them...

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By realfreeenterpriser (registered) | Posted October 07, 2010 at 10:17:49

NoBenifits asked "Realfreeenterpriser, I agree with what you're saying. Is it then safe to assume that you will agree to pay more tax so that the government can afford to give me a pension and benefits, because right now they can't."

Yes, it is safe to assume that I'd agree to a more equitable taxation system where I might well have to pay more but many pension plans (like mine) are jointly funded by employees and employers not taxes.

In a civilized society everyone should have benefits and a decent pension. Those things cost money, however, and successive governments, most especially the Harrisites and the Harperites, have deliberately reduced taxes in what I believe is simply an effort to starve government precisely so that it will be powerless to do things that improve the lot of average citizens. Contrary to your assertion, the government CAN afford lots of things, witness the G8 this summer and the fact that Canada's current federal deficit is due largely to the reduction in the GST.

Balanced budgets are a function of expenditure AND revenue.

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By Ashamed (anonymous) | Posted October 10, 2010 at 12:17:31

I have to confess that I am a single mother of three and I found myself in money touble and I lived in Sam's area and I was behind in rent and he personally covered it so I would not be evicted 3 years ago and I have to say I'm not in a position to pay him back and I feel bad he told me not to worry about until I have it. I was shocked I don't know if people realise how this man cares. I never met a man that woukld do that without wanting something back. I will pay him back one day when I can I promise.

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By ashamed (anonymous) | Posted October 10, 2010 at 12:32:56

My mother just told me I should have told you that cause people might take advantage of Sam. Can you delete what I said.

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