Raise the Hammer

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