Steam billows from a stack at the U.S. Steel Canada plant in Hamilton in this file photo taken March 4, 2009.MIKE CASSESE/Reuters
Wages, benefits, pensions and working conditions will not change for the next 30 months at the U.S. Steel Canada Inc. operations in Hamilton, Ont. under a tentative contract deal reached between the company and its unionized workers.
The stand-pat agreement was reached earlier this week before the three-year contract expired and just weeks after the company was granted protection from creditors under the Companies' Creditors Arrangement Act.
The contract extends the existing collective agreement between the company and local 1005 of the United Steelworkers union to March 31, 2017. But the future of the Hamilton operations, the jobs of 600 workers and the pensions of more than 9,000 retirees will depend on what happens during creditor protection, notably whether United States Steel Corp. sells the assets of its Canadian unit and if so, whether any buyer will agree to observe the terms of the labour contract.
The agreement came without a lockout – which differs from three previous sets of labour negotiations in Hamilton and the company's Lake Erie works in Nanticoke, Ont.
U.S. Steel Canada said in a statement earlier this week that the new contract provides stability and shows employees, customers and other stakeholders that it remains committed to supplying the Canadian and North American steel markets.
The deal means Hamilton employees retained existing vacation clauses and cost of living adjustments (COLA) that were in place during the previous contract signed in 2011, Rolf Gerstenberger, president of local 1005, said Wednesday.
Employees at the Lake Erie mill gave up two weeks of vacation and COLA clauses in an agreement reached after a four-month lockout last year.
Basic wages in Hamilton range from $21.67 an hour for newly hired employees to $32.56 for employees with the most seniority.
Steel making at the Hamilton mill ceased in late 2010 and U.S. Steel announced last October that it would permanently shut the blast furnace. What's left still in operation are two steel finishing mills and coke oven batteries.
The original CCAA plan submitted by U.S. Steel Canada to the Ontario Superior Court called for the company to seek buyers for Hamilton and Lake Erie in two separate stages.
The union and the Ontario government, which is a stakeholder because of a pension deal the province backstopped when U.S. Steel bought what was then Stelco Inc., in 2007, opposed that plan.
After negotiations last week, the company and stakeholders are scheduled to develop a new plan by Nov. 15 that will put all the assets up for sale at one time.
One of the key elements in a sale or in negotiations that lead to a restructuring plan that involves U.S. Steel retaining the Canadian assets is the status of the company's pension plans.
The plans have a solvency deficiency of $839-million. About $573-million of that is the plan for unionized retirees from the Hamilton works.