“We do have to reduce the workforce,” Stelco CEO Courtney Pratt wrote in a letter to employees the same day. The letter outlined a so-called restructuring plan that included cutting jobs, wages, and benefits. One of the chief targets will be pension and medical benefits for retirees, who number 13,000. Stelco’s pension plan is underfunded to the tune of Can$2.1 billion (Can$1=US$.76), when medical and drug benefits are included.

The pension fund shortfall “really makes you think about the times over the years that the company took a vacation from making pension payments,” said Miller. Several years ago, the Ontario government exempted Stelco from the requirement to fully fund their pension plan when their profits slipped. In the first 11 months of 2003, the company lost $206 million on revenue of $2.5 billion.

Like Air Canada in 2003 and Algoma Steel in 2001, both of which declared themselves bankrupt and then forced takebacks on their workforces, the Stelco bosses have signaled their intention to use the mechanism of bankruptcy protection to go after hard-won union wages, benefits, and conditions.

The court order granting Stelco protection under the Companies’ Creditors Arrangement Act (CCAA) allows the company to lay off workers outside of seniority, and to brush aside other parts of its union contract. The company has said it will cut 500 jobs through attrition. Other estimates place job cuts as high as 1,500.

In the United States, giant Cleveland steel company LTV and Bethlehem Steel walked away from the health benefit plans for their combined 180,000 retirees after declaring bankruptcy, leaving the U.S, government to take over their faltering pension plans. Their assets and those of other smaller steel companies have now been restructured into International Steel Group Inc., which now has significantly lower costs than Stelco.

“The CCAA process is an abuse of power,” said Rolf Gerstenberger, president of Local 1005 of the USWA in Hamilton, Ontario. The Steelworkers union represents 3,600 workers there, 1,000 at the Nanticoke operations, also in Ontario, and another 1,000 at smaller plants. Gerstenberger added: “Workers are not creditors, we are the ones who produce the steel.”  
 
 
Front page (for this issue) | Home | Text-version home