U.S. Steel locked out 900 workers at its Hamilton, Ontario, plant this week after the union rejected a company offer that would have denied benefits to new workers and slashed benefits for current retirees. Workers have been on the job since their last contract expired at the end of July.
The company wants new employees to pay into their benefit plans and pensions. Workers currently get defined benefits and receive defined pension benefits when they retire. The company also wants to end cost of living adjustments available to current retirees.
Union leaders at the plant have rejected the demands, saying the company is trying to "shaft" current retirees and future employees.
United Steelworkers Local 1005, which represents the workers, has been criticized by the company and in the media because they have refused to put the concessionary proposal before the membership for a vote.
The company, in a statement, said it was "disappointed" that the union did not put its proposals up for a vote and that its offer was "fair and reasonable."
Local 1005 president Rolf Gerstenberger said the company's proposal cannot be put to a vote because such a procedure would actually be "undemocratic and harm the interests of thousands of retirees."
"One of their major demands will affect 9,000 pensioners, who have no vote. So 900 people in the plant will make a decision on what happens to the living standard of 9,000 pensioners," Gerstenberger said. "That's one of the basic reasons we cannot agree to this vote."
The union has bargained firmly ever since it began negotiations with the company in May. U.S. Steel's latest offer, put forward Nov. 4, dropped prior company demands for concessions on vacation time, benefits and cost of living allowances for current workers but refused to budge on demands regarding pensions and retirees.
The union made a counter offer that the company rejected. It then notified the local that as of 7 p.m. Sunday, Nov. 7, the entire workforce of 900 was officially locked out of the plant.
U.S. Steel took over the plant as part of its acquisition of Stelco in 2007.
Last year the Canadian government sued the company for failing to meet job-related commitments it made at the time of the takeover.
The union says the lockout is only the latest example of how Canadian government policies on foreign takeovers, particularly U.S. takeovers, of Canadian firms fail workers. Canadian law says that such takeovers must produce a "net benefit" for the communities in which they occur.
The current struggle is just the latest in a series, says Ken Neumann, the Steelworkers national director for Canada.
"These workers and their community were promised by their government and U.S. Steel that they would benefit from this foreign multinational's takeover of Stelco," said Neumann. "Instead, the takeover has resulted in pain and suffering for working families in Hamilton, Naticoke, Ontario, and other communities. U.S. Steel's 'net benefit' has consisted of plant shutdowns, production costs, lost jobs and labor disputes."
In March, 2009, U.S. Steel temporarily shut most of its Canadian operations at two big steel plants, the one in Hamilton and the other in Nanticoke, Ontario, affecting 1,500 jobs. It blamed "adverse market conditions."
Ottawa's law suit against U.S. Steel says the company broke production and job commitments and seeks fines of $10,000 a day until the company meets its obligations.
In July, a Canadian court rejected U.S. Steel's attempt to have the case dismissed on grounds that the Investment Canada Act, through which the government monitors foreign takeovers, is too vague.
"Whether it's Vale, a Brazilian company in Sudbury and Labrador, or U.S. Steel, foreign corporations show no qualms about breaking their commitments and inflicting economic pain on our communities," Neumann said. "It's high time that our federal government adopts legislation to protect against such disastrous foreign takeovers."
Last week, Industry Minister Tony Clement blocked an attempt by Australian BHP Billiton to take over fertilizer giant Potash Corporation of Saskatchewan, Inc., saying it failed to meet the Investment Canada Act's requirement of offering a "net benefit" to the country.