How does one value the “word” of a company? The union workers of USW Local 1005 are finding out the hard way. Much like their sister company, Lake Erie Works, before them Local 1005 has been locked out of the plant by corporate U.S. Steel as the mill attempts to re-structure two areas of the union pension plan. The first is to remove a cost of living indexing provision for all 9,000 former Stelco and USS Hamilton retirees. The second is to change the pension program for all “new hires” away from a defined benefit program which is currently in place.

When Steel Market Update communicates with Local 1005, we are reminded of the promises made by U.S. Steel to the workers and to the government when they purchased the former Stelco facilities in 2007.

The union at the time of the sale of Stelco to USS, was very skeptical of the intentions of the company and said so in an article published in the local newspaper back in September 2007. The article was written by Rolf Gerstenberger, president of Local 1005, and he was prophetic when he said, “Whatever USX says now, one year from now it could be a completely different story with fine reasons stemming from ‘global competition’ or a business downturn.”

Union leadership points to the broken promises made to the Canadian government and the workers at the former Stelco facilities. The most egregious being the promise to maintain employment levels at 3,105 workers and to maintain production levels at over 4.3 million tons for a period of three years.

As a result of U.S. Steel not living up to its obligations, the Canadian government filed suit against the company on July 17, 2009. U.S. Steel filed a motion protesting the suit violated its Constitutional protections. U.S. Steel lost that motion. In the most recent ruling, the Canadian courts have allowed the two USW unions – Local 1005 and Local 8782 as well as Lakeside Steel to intervene in the suit against U.S. Steel. The unions and Lakeside Steel would like to see the mills taken away from U.S. Steel’s control.

The case against U.S. Steel continues to crawl through the Canadian legal system while the union management rails against the Investment Canada Act (ICA) under which USS came to buy the former Stelco steel mills and against the company who owns those mills at the moment. Local 1005 sent SMU a new posting regarding their stance on the suit against USS and I expect it will be posted on the union website soon.

Local 1005 has been in communication with Steel Market Update as they feel the blog posts we have been generating do not provide a fair assessment of the union’s position. In an email to SMU earlier today, Jake Lombardo of Local 1005, told us in a meeting with John Surma, CEO of US Steel and Gretchen Haggerty, CFO for US Steel, the executives promised the union they would not go after their pensions and they would be left as is (minus the two provisions which were eliminated as part of their purchase agreement).

Mr. Lombardo provided SMU with correspondence he had with Brian Hatch regarding Mr. Hatch’s opinion regarding the Defined Benefit Plan. At the same time, Mr. Lombardo spoke to the promises made by U.S. Steel to the union:

“ …US STEEL when they purchased us they did their homework. They said they could afford us in a letter to the Spectator and they would not screw a pensioner , would keep us working for 3 years , put money into investments and hire new people . That’s Why the government took them to court [breach of the ICA deal & commitments made by USS] and they keep losing the battle therefore not living up to their commitments . As for taking a contract to the membership the company under law has the right to take it to a final vote. Why would WE take their offer? We asked for a stand pat deal like they said they could afford it that was their words not ours.”

Mr. Lombardo also wanted an opportunity to respond to the most recent blog post by Brian Hatch, a retired former supervisor at the Hamilton facility with the following:

“Hi you finally found someone to be a cheerleader for US Steel. He [Mr. Hatch] hasn’t told the whole story. Here is a little more information for you guys since you are always looking for negative things:

How come nobody talks about Rodney Mott Making a fortune when he sold it [Stelco] to US Steel? In 2008 US STEEL paid out profit sharing cheque to the workers of Local 1005 and next point they told all of Canada they had no problem with a letter to the Spectator [Canadian newspaper]. What’s their problem now?

The UNION asked for nothing the same way they bought us hope you print my response the same way you printed his I have no problem debating one of the guys responsible in putting us in this mess . The UNION is not the Problem. They [former Stelco Mills] have been mismanaged for years that’s why Dofasco makes money. Maybe we should change management teams . Thank-you for your time.

Jake Lombardo Local 1005.”

Meanwhile, we received another note from Mr. Hatch:

"I know the viewpoints expressed in my letter are controversial. They were intended to be! This letter [former blog post with more to come] is my attempt to get people talking about real facts not political rhetoric, emotional beliefs and half truths.

I think one thing all can agree on is that know body benefits from a long bitter lockout or strike and this one has the potential to be just that. Everyone will suffer to some extent. The current employees (hourly and salaried), all pensioners, the company, the suppliers and their employees, other business in the city and the city itself. Unfortunately it is often the small innocent people and companies that will be adversely effected the most.

My hope is that the parties involved will look at all of the issues from all sides and then use some creative "out of the box thinking" to resolve the impasses.

Good Luck All

Brian Hatch

Former Stelco employee and Current US Steel Pensioner”

SMU Position:

We are aware this is an emotionally charged subject with opinions on all sides. SMU does not belittle the impact the lockout is having both on the workers and their families as well as the greater Hamilton community. Our hope is both sides will find some common ground and will be able to bring the workers back to their jobs as soon as possible. We hope our Blog will provide an outlet and a place where opinions can be expressed.

Mr. Lombardo’s and Mr. Hatch’s comments and opinions are theirs and do not represent the opinions of Steel Market Update. The same can be said for comments which are made by others to our Blog posts. We are publishing them on our Blog in an effort to keep the steel community aware of the lockout and the issues which are being discussed (and hopefully eventually negotiated) by both sides.

Until then we welcome your comments.

We reserve the right to not publish comments which we deem as offensive, threatening or non-productive to the subject being discussed.

If you would like to see a list of SMU most recent blog posts CLICK HERE.

If you would like to register for a free trial to our Steel Market Update newsletter which is published three times per week CLICK HERE.

If you would like to know more about our services, pricing and how to become an annual member CLICK HERE.