Skip to main content

The plan to shift production to U.S. mills has infuriated the United Steelworkers, which represents about 1,500 workers at the two mills.

MIKE CASSESE/REUTERS

The union representing workers at United States Steel Canada Inc. will ask the Ontario Superior Court to block a plan by the company's parent company to shift production of some its highest-value-added steel out of Canada.

The plan to shift production of automotive steel from mills in Hamilton and Nanticoke, Ont., to U.S. mills has infuriated the United Steelworkers (USW), which represents about 1,500 workers at the two mills and is fighting to maintain jobs and save pensions at the Canadian unit.

"The USW believes this 'move' by USS [United States Steel Corp.] is designed by USS to have a devastating impact on the revenue earnings and cash flow of Hamilton Works and Lake Erie Works at a critical and vulnerable time," the union's lawyer Ken Rosenberg said in a letter Thursday to Justice Herman Wilton-Siegel, the Ontario Superior Court judge who is overseeing the restructuring of the Canadian unit.

Story continues below advertisement

"The urgency of this matter supersedes all others before this court regarding USSC [United States Steel Canada]," Mr. Rosenberg said in the letter, which added that the union will be seeking "injunctive relief" to halt the U.S. Steel move.

The actions by the company and countermoves by the union escalate a battle that has been building as U.S. Steel Canada approaches the end of its first year of restructuring under the Companies' Creditors Arrangement Act.

"This is where things heat up," said Bill Ferguson, president of Local 8782 of the union, which represents workers at the company's mill and pickling plant in Nanticoke.

Part of the restructuring includes the potential sale of the Canadian operations. Two bids have been submitted for the entire Canadian unit, one by Essar Steel Algoma Inc., which has a deep-pocketed parent company in the form of Essar Global of India.

U.S. Steel has also bid to buy back the Canadian unit it placed into CCAA protection last September.

Shifting the automotive contracts means the loss of about 17 of 550 jobs that remain at the Hamilton operations, said Gary Howe, president of USW Local 1005, which also represents more than 10,000 pensioners.

"With the value of the dollar, we're probably a lower-cost location," Mr. Howe said.

Story continues below advertisement

The remaining Hamilton operations are coke ovens, a cold mill and a galvanizing line that finishes steel for automotive body applications, which are among the highest-value steel coils sold by U.S. Steel.

The shift of production of 180,000 tons annually out of Hamilton and Nanticoke was identified by the court-appointed monitor last month as a move that would harm the Canadian unit.

"The product generated at USSC's mills is ultimately one of the key drivers generating revenue and cash flow, as semi-finished or finished mill products are ultimately sold to Canadian and U.S.-based customers or to other USS mills for further processing," the monitor's report said.

The shift in production is scheduled to be made by the end of October, despite requests by the chief restructuring officer of U.S. Steel Canada – whose appointment was approved by the parent company – that any change be delayed until Jan. 1.

Lawyers for U.S. Steel fired back earlier this month in a letter on the monitor's report that its Canadian operations have not "suffered the effect of the downturn in the steel market as keenly as some of its sister plants in the USS organization."

Separately, spokeswoman Brenda Stenta of Essar Algoma said that if the Sault Ste. Marie, Ont.-based company has made a bid, "we wouldn't comment."

Story continues below advertisement

Court filings show that Algoma and ArcelorMittal Dofasco Inc., which is U.S. Steel Canada's neighbour in Hamilton, have hired lawyers who are now part of the CCAA process.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies