Canadian Labour Reporter is the trusted source of information for labour relations professionals. Published weekly, it features news, details on collective agreements and arbitration summaries to help you stay on top of the changing landscape.
Issue link: https://digital.hrreporter.com/i/593661
a whole, according to Peter Warrian, senior research fellow at the University of Toronto and former research director for the United Steelworkers. "At some level in this, he had to choose be- tween the pensioners and the industry," he said. "The impact on Hamilton and Southwest- ern Ontario's economy has to be understood," he said. "If you think manufacturing is impor- tant, and I do, steel is 80 per cent of manufactur- ing. We wouldn't have the auto industry we do without the steel industry, and the other way around. That's an important link. It is very im- portant for the industry, notwithstanding the legitimate concerns about the pensions. And I think the judge, being placed in that position, exercised a choice in favour of the industry." USSC was formed after U.S. Steel pur- chased Stelco in 2007. Commitments were made concerning employment, production levels and investments in the Canadian facili- ties, but the company argued those commit- ments became unattainable following the 2008 recession. The federal government sued the com- pany but subsequently withdrew the suit and signed another three-year deal with U.S. Steel. The details of that agreement have never been made public. The government might once again take the company to court, according to James Moore, Canada's industry minister (as of press time). "It is unacceptable that U.S. Steel Canada is abandoning these workers and their families. These obligations were not imposed on U.S. Steel Canada but, rather, were the result of promises made to generations of workers who helped build the company and, indeed, an en- tire industry in the heart of Southern Ontar- io," Moore said in a statement. "While it is important that the company be given the tools it needs to become viable long into the future, this should not ever mean al- lowing them to wash their hands of those to whom they should be grateful." Moore said the federal government would ensure USSC upholds its commitments to the benefits and pensions of its workers. "We are the only government that has taken U.S. Steel Canada to court and are not afraid to do so again," he said. Warrian, however, dismissed this threat as political speechifying in the last days before the federal election. "Given all the stakes for the industry and for the community, it's outrageous that this secret agreement between U.S. Steel and the govern- ment hasn't been made public," Warrian said. "None of us know what their obligations are or are not without seeing the agreement. U.S. Steel and Mr. Moore's government have patently refused to release the agreement. So, this week-before-the-election claim by the minister is a little late in the day given his pre- vious actions." Union concerns Gary Howe, president of USW Local 1005 in Hamilton, would like to see the attention shift away from politics and onto the people in- volved. "Working in a steel plant is hot, dirty, dan- gerous work," Howe said. "When these work- ers that are now retired were on the job, they worked at a time when there were a lot of dan- gers and hazards." Many former employees now suffer from work-related injuries and illnesses. Howe himself has lived with Non-Hodgkin's Lym- phoma for 15 years. He said there is "no doubt" these illnesses were caused from working in the plant. Retirees therefore feel justified, Howe said, in calling on the company to help them pay for the often expensive medications they require. And while workers' endangered pen- sions at least have a safety net in the Ontario Pension Committee, Howe said these desper- ately needed medical benefits do not enjoy the same support. Because the medical benefit plan is funded by the operational budget of the company, former employees are relying on USSC's fu- ture viability for their medical benefits. Be- cause Wilton-Siegel's approved transition plan for USSC leaves the company open to selling all or part of the Hamilton and Nan- ticoke plants in the future, Warrian said the best hope for retirees is the right partner. "You've got to bring together a company in very adverse circumstance," Warrian said. "I have a tough time seeing the mill surviving as an orphan. I think it'll find a strategic partner- ship somewhere. I'm hopeful. Because if there is a bidding process, I believe two kinds of bid- ders will emerge." The first type of bidder, Warrian said, would be a strategic inquirer. The strategic inquirer would buy USSC altogether with the intention of making further investments into the company in the future — something War- rian said is crucial for the long-term health of the industry. The second type of bidder, he said, would be more akin to someone trying to purchase assets in a fire sale. While Warrian said these bids for individual pieces could result in a larger upfront dollar amount, they would not contribute to the stability of Ontario's econo- my. "If you take the narrow interpretation of getting every dollar to offset the pension li- abilities, you'd be tempted to take bid number two," Warrian said. "If you're worried about the long-term health of the industry and the long-term health of the economy, you go with bid number one." 7 Canadian HR Reporter, a Thomson Reuters business 2015 CANADIAN LABOUR REPORTER NEWS < from pg. 1 Industry minister warns of possible court action Photo: Todd Korol (Reuters) While some safety nets exist for retirees' pension plans, USW Local 1005 president Gary Howe warns of the lack of support for former employees' medical benefits.