Welcome Back, Stelco

[SteelTown]

U.S. Steel idles Lake Erie coke ovens

July 09, 2009
Naomi Powell
Hamilton Spectator
http://www.thespec.com/News/BreakingNews/article/597228

U.S. Steel is idling its Lake Erie coke ovens, raising the threat of further layoffs at the Nanticoke plant.

Nearly 100 workers are expected to be cut by the end of July, adding to the 800 employees already on layoff.

“It was a shot across the bow we weren’t expecting,” said Stu Patterson, a representative with the United Steelworkers Local 8782 in Nanticoke. “Especially with the announcement that they’re restarting Hamilton.”

Indeed, just as the coke ovens go down in Nanticoke, they are coming back to life at U.S. Steel’s Hamilton plant, where 800 laid off workers are being recalled.

[SteelTown]

Ottawa seeks court order to force U.S. Steel’s hand

July 17, 2009
By Naomi Powell
Hamilton Spectator
http://www.thespec.com/News/BreakingNews/article/601966

The Canadian government is asking a federal court to force U.S. Steel to live up to the promises it made when it bought the former Stelco.

Industry Minister Tony Clement said he is “not satisfied” with U.S. Steel’s response to a demand letter asking the firm to comply with its commitments on production and employment levels.

“I have carefully reviewed U.S. Steel’s response to my letter,” Clement said in a release. “I remain of the view that U.S. Steel is not complying with its undertakings, and I am not satisfied by its explanations for non-compliance.”

Clement will ask the court to order “appropriate measures” to remedy the situation.

He has said Canada can pursue a number of remedies, including "unwinding the deal" that led to its $1.9 billion purchase of Stelco in 2007. It could also seek court penalties of $10,000 a day.

In a statement, U.S. Steel said it had received the court documents and would “vigorously defend” its record at U.S. Steel Canada.

“We are disappointed that the Minister has apparently decided to pursue the matter in the courts while ignoring our numerous requests to meet with him on these issues and while disregarding the Ministry’s own guidelines with respect to foreign investment,” said Jim Garraux, General Counsel at U.S. Steel.

Clement sent a demand letter to U.S. Steel in May, shortly after the Pittsburgh steelmaker shut down its plants in Hamilton and Nanticoke due to a worldwide slump in demand for steel. The firm subsequently laid off 2,190 Canadian employees.

Clement has said that the shutdown violated a set of undertakings the firm made when it bought Stelco in 2007. Industry Canada has not disclosed the specific commitments made by the firm and full details of the firm's agreement with Canada have never been released.

But in a filing to American securities regulators in 2008, U.S. Steel identified promises to "maintain employment levels" at the former Stelco and commit $200 million in capital expenditures. About $100 million of that investment was to be spent at Hamilton Steel.

Though U.S. Steel has gradually ramped up steel production at plants in Indiana and Illinois, it has not restarted any steelmaking operations in Canada.

The firm recently recalled 800 Hamilton workers, though union leader Rolf Gerstenberger has said the move was made in order to avoid setting aside about $15 million in severance pay for workers. The payments become mandatory under Ontario labour law when workers are laid off more than 35 weeks.

U.S. Steel’s Hamilton coke ovens are now the only Canadian facility in operation. The firm recently shut down cokemaking at Lake Erie Steel in Nanticoke - where it is in the midst of renegotiating a labour contract that expires on July 31.

“It’s long overdue,” said Tony De Paulo, area coordinator for the United Steelworkers union. “We’ve been waiting for someone to take them on and this will only make negotiations more interesting.

[matt602]

About time we stand up for this at the Federal level. Don't back down, don't concede an inch. It's time to stand up for our national identity.

[SteelTown]

U.S. Steel's Canadian workforce shrunk to 23 per cent of promised amount

By Kristine Owram (CP)
http://www.google.com/hostednews/can...FB7Jn5A4_Cf9gA

TORONTO — As of May, the workforce at U.S. Steel's Canadian operations had shrunk to only 23 per cent of the number of workers it promised to employ when it took over the former Stelco, according to documents filed with the Federal Court of Canada and obtained by The Canadian Press.

The Pittsburgh-based company (NYSE:X) also repeatedly broke production promises it made to the federal government, with the amount of steel produced by its Canadian operations as of May representing "a small fraction" of the amount it was required to produce on an annualized basis, the documents say.

The Canadian government is suing the American industrial giant to force it to live up to workforce and production commitments it made when it bought Hamilton-based Stelco in 2007.

This is the first time a foreign company has been taken to court by the federal government for failing to live up to promises made during a takeover of a Canadian company.

According to the Federal Court application made by the federal government, U.S. Steel made two major promises when it acquired Stelco: that steel production between Nov. 1, 2007 and Oct. 31, 2009 would be greater than or equal to 4.35 million tons (3.95 million metric tonnes) a year, and that it would maintain an average employment level of 3,105 full-time workers at its Canadian operations.

However, the application says that U.S. Steel produced slightly less than the benchmark level in 2008, and that as of May 20, 2009, its Canadian business "produced a very small quantity of steel, which on an annualized basis, would represent only a small fraction of the amount the Canadian business was required to produce pursuant to the production undertaking."

Hamilton-based U.S. Steel Canada shut down most of its Canadian operations in southern Ontario this spring, affecting about 1,500 employees at mills in Hamilton and Nanticoke, Ont., because of weak markets. In addition, U.S. Steel said 810 workers had retired or were planning to.

As a result, only 23 per cent of the 3,105 workers promised in the employment undertaking were actively working for U.S. Steel's Canadian operations as of May 20.

After the mill shutdowns, Industry Minister Tony Clement sent a demand letter to U.S. Steel, asking the company to comply with its 2007 commitments.

The application says the company responded by saying it shouldn't be held responsible for "factors beyond their control" - namely, the drop in steel demand as a result of the global recession.

Clement said Friday he has carefully reviewed U.S. Steel's response to the letter and wasn't satisfied by the company's explanations for non-compliance.

Clement said the government has now asked for a court order mandating U.S. Steel meet its promises or face a $10,000 daily fine.

Since the initial mill shutdowns, the company has recalled 800 workers to its Hamilton mill who will come back to work over the summer.

[emge]

When over half of your workers retire, it's a good time to just let it go... especially when it's a polluting eyesore that employs a small part of our population.

So of course, we're going to sue the company to get them to keep the bare minimum up, employing a few on an enormous eyesore on waterfront land that's holding Hamilton back in the eyes of the province and the world.

wheee...

[markbarbera]

emge, there's a completely different perspective to be appreciated here. This 'eyesore' may employ a small fraction of our workforce, but it is among the best paid workforce in this city. And, when over half the employees retire, it's not time to let it go, it's time to hire 850 currently unemployed Hamilton citizens to replace them.

Closing up shop will leave a huge empty plot of land that would require serious remediation that would make the Randle Reef cleanup look like a minor cleanup. So if you think a closed-up steel mill would suddenly transform into lush parkland and condo towers, think again. What you would end up with is a huge rusting empty brownfield for the city to contend with for decades to come. It may be an ugly polluting eyesore to the delicate eye of a Torontonian, but for Hamiltonians it is symbolic of our industrial heritage, and a significant contributor to Hamilton's tax coffers (likely the largest single source of corporate tax dollars for our municipality). Better it be a revenue-generating eyesore than a vacant, costly eyesore.

This recession was particularly hard on the steel industry, but recovery is inevitable. And when the economy does recover, this plant's efficiencies in productivity will see it return to (and likely surpass) its 2008 production levels in no time. Predictions of its demise are greatly exaggerated. I'd put my money on this plant being a top steel-producing performer for the industry come 2012 (and I predict it'll be under new ownership by then as well.)

[SteelTown]

One of the possible outcome is that U.S. Steel could lose Stelco and returned to Canadian control. I believe Algoma was governed by a board of directors made up of community leaders in the past.

[flar]

A friend of mine who does work at both Stelco and Dofasco says that US Steel is planning some upgrades that suggest they're in it for the long term. I think steel will be made in Hamilton for a long time.


As much as people think the steel mills are an eyesore and big polluter, I really believe the best case scenario for Hamilton is that Stelco stays open. Not only for the jobs, but because if the Stelco closed it would end up sitting there rotting away for decades. The cleanup costs would be astronomical and the current level of investment in Hamilton by both public and private sectors suggests there is no one who would be willing to foot the bill. If there is going to be a gigantic hellfire on the harbour, it might as well be producing something and providing jobs.

As for pollution, they pollute (obviously), but the extent of their pollution in the local environment is overstated. Most of the air pollution from Stelco heads east on the prevailing winds to fall elsewhere. The pollution experienced in Hamilton is mostly from local auto traffic and the hundreds of coal fired generating stations in the midwestern US. Sometimes there is a heat inversion and lower Hamilton stews in Stelco's exhaust. If it feels like the air is cleaner this year it's because summer's heat and humidity has not really arrived.

[emge]

If there truly was a future in steel, where people could still walk into a plant and get a well-paying job, that would be exactly what we need.

However, in a world where you need a two-year diploma to get a job in steel, and an aging and largely retiring workforce, there's nothing steel does anymore that isn't outweighed by the eventual benefits from them closing down.

With the newer Nanticoke works in place, it seems highly unlikely that the eventual consolidation of their operations will retain Hamilton as a part unless they are forced to, especially given how they've slashed jobs in other areas.

Of course brownfield remediation is lengthy, complicated, and expensive -- but if it's inevitable, and it certainly seems to be, however nostalgic we wax, let's look beyond 2012... so that remediation happens by 2032 instead of 2042.

[matt602]

Bethlehem Steel is a pretty good example of what we'll be stuck with if Stelco closes shop. Not a good thing.

[emge]

i am no big fan of casinos, but it was brownfield redevelopment with residential/retail planned as well... why would that necessarily be worse? and it only took about 12 years to happen..

My point all along has been that it's futile to try to preserve these jobs indefinitely, especially when we have older facilities than the company has elsewhere, and a fraction of the workforce here we once did. Trying to preserve things on this particular spot of land for this particular company is likely going to be futile, and if we only have one steel company left employing people in Hamilton, then I think that we can maintain our history and move forward, especially with the geographic location of this piece of property. It would be far different if we were dealing with the other piece of land with other industrial in between it and current waterfront instead of just a little bit to deal with.

[flar]

I think it's actually the Nanticoke site that is in danger of permanent shutdown. The reason is that Nanticoke easily ships across Lake Erie, but US Steel doesn't need shipping access on Lake Erie. They do need shipping on Lake Ontario and the St. Lawrence, which the Hamilton location offers. I believe the Hamilton site also has US Steel's only functional sintering plant. I used to think Stelco was doomed, but after some info I got from people who work in the steel industry, I really don't think it's closing permanently.

[emge]

And that might be where my logic breaks down --- I've always assumed it was a given the newer/efficient/cleaner facility would stay open, but those shipping considerations are very real.

[graupner]

I also believe Hamilton has a much bigger capacity, making it more attractive and productive, even if it's more obsolete.

But still, on a long term horizon ( 30 years) it will close for good.

[realcity]

Stelco was Canada's first steel maker. It was considered that a country wasn't totally developed unless it had its own steel manufacturing. Cities from Montreal, Kingston, Toronto and Hamilton were bidding for the location.

Stelco was the first and if it closes it will be the last steel maker in Canada. After that we won't be making our own steel as a country was would that say?

[adam]

That's the way I feel about lack of production. We barely make anything. Everything is made in China. This is just the next logical step.

[realcity]

The gov instead of bailing out GM should've invested the $ into a true Canadian car company. Something that would be specialized for our environment, similar to how Volvo was made for Sweden's climate. Volvo's are ideal for Canada too but are largely unaffordable here but in Sweden they are the car for the everyday person.

[Emanuel Nicolescu]

Hello,

I'm a Torontonian who likes to keep an eye out on Hamilton. My impression is that the siderurgical complex in Hamilton is there to stay for decades to come. It would be illogical to throw away Hamilton's history with steel and its geographic advantages. We will always need steel products, and we won't always have cheap petroleum products to ship steel from Asia. At some point in the future, manufacture will come back home out of necessity. The sites that will have kept their locational advantages will be the most competitive when that time comes. By its very nature, the market will try to prolong the current state and avoid that time, but wise governments would be wise to encourage acceptance of the inevitable.

Cities are pushed to become service hubs, yet at the same time we see corporations off-shoring IT and other high-paying service jobs to Latin America and Asia where labour is more competitive (read: cheap). Our competitiveness therefore becomes reliant on over-education. Whereas in the past the middle-class made up the largest component of the population and sustained itself through manufacturing jobs, it is now shrinking and the population is polarizing. In spite of what Florida and others like to preach, we can't all make six figure salaries working in the media industry or playing with inflated virtual assets. We live in a physical reality and sooner or later, someone has to produce something tangible to keep the whole construct operational.

I'm surprised by Hamilton's apparent complex of inferiority, especially when it comes to the steel image. The hammer should be proud of its history and its productive capacity. Replacing the mills - a productive element - with condos - a comsuming element - does not seem wise in the long term. Steel is there for a reason, it would be a gross error to forget that. At a time when we strive for cleaner technology, we musn't forget that wind turbines, rail and electrical vehicles all need steel. We can either buy it and transport it from somewhere else, or produce it locally.

All of this applies to most any other city and economy.

Regards,
Emanuel

[realcity]

Thanks Emanuel for your comment.

I totally agree.

I don't want to see Hamilton's east harbour turned into condos. I like to think and wish it will always stay heavy industrial and make steel. I'm not ashamed of hardhats and lunch boxes but proud of them. and proud of Hamilton's history. I don't have an inferiority complex about the views along the elevated Burlington St and the Skyway bc I know you don't see that anywhere else in Canada and probably not many places in the world.

One day perhaps it will become a cleaner industrial area with wind powered instead of coal/coke powered... or in the case of Dofasco hydro (which is still coal powered) blast furnaces. But ya... one day soon, manufacturing will become less globalized again.

[emge]

Is it really a condos or steel dichotomy? We're not losing both companies here.

It seems that if Stelco shuts down (as its workforce has been hacked to a fraction of what it was before, they have newer, if less comprehensive facilities, elsewhere, and they've already done temporary closure) that would allow a wide range of redevelopment and many times the amount of people employed there. Imagine a Master Waterfront Plan that included all of that land too- with retail, residential, commercial - and a remedied waterfront all the way.

And then a commercial buffer, and then Dofasco.

We don't lose our whole heritage. No one's saying "pardon my lunch bucket" But we do gain a well-situated chunk of land that will only be more and more in demand as the surrounding areas continue to increase density and drive up their prices, and as we (eventually) limit sprawl creates a huge chunk that can be better used than keeping that few people employed - and can potentially employ ten, twenty, a hundred times as many over a variety of uses.

When we have a set of circumstances like this, is it better to keep 700 or so (which is what we have left after the retireees) employed on a large chunk of land, especially when steel no longer has the distinction of creating well-paid entry level jobs, which are quite rare and getting rarer, but jobs that have similar education requirements as other entry-level college-education jobs..................... or to start looking long-term at the future and seeing what the potential for that land could be for many different employers?

Not everyone will agree, but I don't think it's an either/or.. I think it's both/and.