It doesn’t appear U.S. Steel is any big hurry to settle with USW Local 1005 which represents the workers at the U.S. Steel Hamilton Works mill in Canada. On a number of occasions during the U.S. Steel earnings conference call with analysts earlier today (Tuesday) the subject of Hamilton was brought up and each time the company left the impression the mill would not be in operation any time soon. However, USS did say the issues were in a "collective bargaining situation" so there is still hope a resolution can be found for all involved.

Here are some of the comments made regarding the Hamilton mill by various executives of U.S. Steel. The comments are taken from a copy of the U.S. Steel conference call transcript. We have edited the information to eliminate information not germane to the Hamilton plant. However, if you would like a full transcript of the conference call you can get one by going to SeekingAlpha.com. The transcripts do carry typo’s and other grammatical errors and we have left them as is unless we recognized a gross error in which case we have put brackets around the affected word.

Hamilton Works – $40 Million Loss to 4th Quarter Earnings

“Also our Hamilton Works iron and steel making facilities were [idled] in October and we incurred approximately $40 million of idle facility caring costs during the fourth quarter…” John Surma, CEO.

“Average realized prices are expected to increase from fourth quarter 2010 as we expect to begin realizing the benefits of increasing spot and some market based contract prices throughout the first quarters. Increases in some of our index-based contract prices should be realized in the second quarter as higher published market priced assessment enter the index calculation. From this raw fuel capability utilization is expected to increase for the fourth quarter of 2010 as all of our blast furnaces are expected to operate for the majority of the period except for Hamilton Works, which is subject to a labor dispute.” Gretchen Haggerty, CFO.

The following are from the Question and Answer period between the steel analysts and the company:

Q – Timna Tanners: It sounds like you’re going to be running most everything in flat roll besides Hamilton in your plans for the near future. Is that fair?

A – John Surma: I think so, Timna. We’ll have the occasional relatively brief maintenance outage for one thing or another but at least in the near term as far as we can see, in North America, we have all of our fire power fired and Hamilton because of the situation is not available us to. We’ll be running everything pretty well for the next few months.

Operator: Our next question’s from Mark Parr with KeyBanc Capital Markets. Please go ahead.

Q: Hey. Thanks very much. Hey. Good afternoon.

A: Hey, Mark?

Q: A couple of questions. The lockout costs at Hamilton how persistent is that? Or can you give us some color on what you’d expect the magnitude of that to be on a go forward basis?

A – John Surma: It’s hard to make a real big dent in it, Mark, when you look at the components. The single biggest piece would be fuel and utilities. And that’s going to be higher in the colder months. But still, we got to run boilers and pumps, and we have to circulate things to keep the equipment ready and everything in working order. So that’s really in power for heat and light for the things that has to be climate controlled. So it’s really hard for us to cut that back. We’ll continue to chip away at it. But it’s the single biggest piece.

Depreciation, not much you can do about that. We have a certain level of labor necessary for fire watch and those kind of things. So we’ll try to whack it down, and I think our experiences in 2008 and 2009 gave us, regrettably, some experience in that. But to try to make it go away while we’re still trying to operate things is pretty hard to do. And we’re still operating the Coke battery so some of the cost is going into that. But it’s hard to make it go completely away. We’ll continue to work at it. But it’s probably going to be in that zone for some time.

Operator: Our next question is from Charles Bradford with Bradford Research. Please go ahead.

Q: Good afternoon.

A: Hi, Chuck.

Q: Kind of an off the wall question on labor. Do you know of any plans other than the one in Hamilton where the pension plans had an index feature?

A: No. No, we don’t. The other – we one we knew about was Lake Erie. I think we made some progress on in the last negotiation. For that matter, Chuck, I don’t know if – I don’t know of any plants integrative flat furnace based plants in North America that has a defined benefit pension plan at all at this point. There may be one or two, but I don’t know what it would be.

Q: [indiscernible]

A: Pretty much, yeah. The old one will obviously continue. But for new hires, that’s the I don’t know of any continuing defined medical plan in the business anymore.

Q: Are there any ongoing negotiations in Canada?

A: We’re in a collective bargaining situation. We’d prefer to keep that between us and them. That’s not necessarily what they do, but we prefer to be genuine about it and keep it between us and them. With respect, Chuck, I’m going to refrain. When there’s something worth reporting, we’ll make sure everyone knows about it.

SMU Note: The U.S. Steel Hamilton Works facility has been locked out by U.S. Steel since Sunday, November 7, 2010.

We have a number of Blog Posts on the situation at the USS Hamilton facility on our website.