Local 1005 Updates

During a debate in the Ontario Legislative Assembly on October 6, 2010 Dwight Duncan, Liberal Finance Minister was asked to comment on the statement that the “loan that this government gave to Stelco made the sale of Stelco more attractive because it lessened the liability that U.S. Steel would have been responsible for.”

In reply Duncan said, “The government’s original involvement was to protect workers’ pensions. We did that. That was appropriate at the time. That was supported by a range of advocates in the Hamilton Community. It remains the right thing to have done at that point in time.”

The thesis Dwight Duncan presents is that the government’s concern after Stelco’s application for bankruptcy protection was the workers’ pensions, not the reality that everything was done during and after bankruptcy protection to facilitate a small gang of rich making a “big score.”

Local 1005 USW said right from the beginning of the Companies’ Creditor Arrangement Act(CCAA) process January 29, 2004 that “CCAA is legalized theft.” After almost two and a half years under CCAA during which Stelco had record quarterly profits, the “new” Stelco under bankruptcy control of Tricap, Appalosa and Sunrise, and a new CEO from the United States called Rodney Mott put $400 million into the four pension plans. Once they did that they received from Ontario a $150 million loan at 1% interest for ten years. If by December 31, 2015 the solvency deficiency of the four plans is paid, the “new” Stelco would be able to keep $100 million of the $150 million as an outright grant. The “new” Stelco committed to make 5 yearly payments into the plan of $65 million and five years of $70 million, which would theoretically make the plans solvent by 2016.

The shares in “old” Stelco were eliminated without compensation and the gang of Tricap, Appaloosa and Sunrise and Rodney Mott received over 24 million shares in the “new” Stelco at $5.50 apiece. After 18 months, these “new” shares were flipped to U.S. Steel at $38.50 per share. Tricap et al. made 700% on their “new” $5.50 shares in 18 months. (In fact, the total Mott and others paid for the “new” shares was less than the Ontario government’s $150 million 1% loan and grant, which means that the Provincial government could have owned all the “new” shares in Stelco for less that its grant/loan. Instead, the Tricap led gang scurried away with around a billion dollars.)

It should also be noted that the $400 million that Tricap and others put into the four pension plans was borrowed under the “new” Stelco’s name at high interest rates. When U.S. Steel purchased Stelco for $1.2 billion in cash, it also assumed the existing Stelco debt of about $750 million, which included the $400 million borrowed to put into the pension plans.

Our concern at the time was that Rodney Mott, Tricap et al. made a big score taking for themselves around $1 billion, which could have been used to fully fund the pension plans or even invested in the mills. This of course was not done.

Now, a real threat is looming that U.S. Steel may crater Hamilton Works, and the pension plans are still far from being fully funded. So when Dwight Duncan says his concern in 2006 was to protect pensions, that concern should have been expressed in deeds to prevent a pay the rich scheme that saw a few wealthy individuals and finance companies make a big score at the expense of Stelco and the people of Ontario.

In addition to allowing this scam, the Provincial government and the courts then permitted U.S. Steel to remove two provisions from the pension agreement coming out of CCAA, which provided some legal protection for the pension plans. Not only did the government allow a big score, it facilitated the creation of even more problems for the pension plans and a further crisis.

For the record, the responsibility of the Provincial government is not a thing of the past. They must be held to account for whatever transpires at this time as well.

There has been a change in the date for the first meeting with the Conciliator. The first meeting will now take place on Wednesday, October 13, 2010. We will keep our membership informed as to how the talks are progressing.

OPPOSE THE HARPER GOVERNMENT’S ANTI-CANADIAN, ANTI-SOCIAL PAY THE RICH SCHEME!

The Harper government in power has announced a whopping one billion dollar Export Developmnet Canada (EDC) low interest loan to the Vale global mining monopoly. Half the loan is for the operations in Canada while the other half will finance its operations outside the economy.

To add insult to injury, this traitorous announcement was made the same day that Vale once again broke off contract negotiations with miners at its Voisey’s Bay Labrador nickel mine operation. One hundred and thirty members of USW Local 9508 have been on strike for 15 months resisting Vale’s outrageous demands for even greater concessions than the monopoly forced from workers in Sudbury and Port Colborne.

It is unconscionable that Harper would finance one of the largest global monopolies that has broken its obligations to maintain certain employment and production levels after seizing Inco in 2006 and is currently using its global power to wrest even more concessions from Canadian workers. Not only is Vale taking out of the mining communities and country more and more value produced by Canadians from our own resources, the Harper government is financing its vile deeds from the public treasury.

The pay the rich schemes of the federal EDC to give Vale a billion dollars is yet another example of Harper and his government standing with a global monopoly and using the public treasury in opposition to the interests of the people and their rights. Canadians must stop the Harperites from subverting the country and turning it into an annexed protectorate of the global monopolies.

USW LOCAL 1005 IS CALING ON HAMILTONIANS

TO ATTEND THE CITY COUNCIL MEETING

AT HAMILTON CITY HALL

WEDNESDAY, OCTOBER 13, 2010

ASSEMBLE BEGINNING AT 6:15 P.M.

A MOTION TO KEEP HAMILTON STEEL PRODUCING

AND TO CALL ON U.S. STEEL TO BARGAIN IN GOOD FAITH

WILL BE DISCUSSED

INFORMATION UPDATE MEETING

EVERY THURSDAY @ 3:30 P.M.

“Report on latest developments at Stelco”

AT 350 KENILWORTH AVENUE NORTH

Under the terms of the Ontario Labour Relations Act, if a company and a union have a collective agreement that is expiring (The U.S. Steel-Local 1005 USW contract expired July 31, 2010), if neither party files for a conciliation officer, the terms of the present contract continue indefinitely. When one of the parties to the contract files for a conciliator, and after a “No Board” report is issued, the company will be able to lock out the workers 17 days after the issuing of a No Board report. Or the union could be in a strike position if it has taken a strike vote. At this time, neither party has asked for a conciliation officer.

At the time of printing, U.S. Steel is still demanding concessions from its workforce at Hamilton Works. These concessions include the demand that new hires be placed in a defined contribution savings plan, thus ending over 50 years of workers having a pension plan; the demand to eliminate the pension indexing formula for the over 8000 pensioners; the demand to stop covering the health benefits for the over 180 members of the plan who have exhausted the $70,000 limit on benefits. As well they are proposing that the maximum vacation time a worker will have is five weeks from the present 7 weeks, and they want to change the cost of living formula such that a worker would receive about 20% of what the previous formula paid.

It is being raised in some circles that it would O.K. to agree to a DC savings plan for new hires as long as we got a “guarantee” from U.S. Steel that they would not touch the indexing for the pensioners. (It should be pointed out in 2003, less than one year after we signed an agreement, Stelco wanted a 20% cut in wages and benefits. Six months after this, Stelco tried to use CCAA to get out of their obligations to the workers. U.S. Steel reneged on their commitment to the federal government one year after they made them.) Anytime a company wants to break a “guarantee” to the workers they use the excuse that the economic situation has gotten worse, and they need relief. The reality is that if we were to agree to a DC plan for new hires, in a short period of time we would have a large part of the workforce not even part of our pension plan. In the next round of bargaining, the company will again try to get rid of the indexing, and why would the new workforce fight to save the indexing if it has nothing to do with them? Right now they want to accomplish it in a one step process, but they figure if they don’t get it now, they will get it later. Without indexing, those pensioners who recently retired can expect to live 20-30 years and could lose as much as 50% of their purchasing power because of inflation. A pensioner, if he is 50 or so years old and his income is not sufficient, he can go get a job. But try to do that when you are 75-80 years old and your pension has been reduced by inflation.

There is some confusion as far as the origin of the recent savings plan agreement at Lake Erie. Some circles are presenting this as something new and original for Stelco workers. It should be pointed out that in 1997 the old Stelco closed the salary plan to new hires, and put all new salary employees into an “opportunity plan” where the company gave new supervisors a sum of money to do as they please to look after their retirement. (A form of self-directed RRSP, or in simpler terms, a DC saving plan.) It is interesting that the DC savings plans are now becoming the flavour of the month; some want us to believe that it is something new! It is not a pension plan. At most it is a savings plan, where no one can tell you what you will get when you retire!

One of the big concerns we have is we feel companies want to get out of Pension plans because they know that there will be another collapse of the market, and they no longer want to be on the hook for

U.S. Steel says the downturn in the business cycle in 2008 forced it to break its contract with the

government of Canada on employment and production levels. U.S. Steel also explains that that is why they need to get out of pension plans at its plants in Canada, even though in 2007 they stated that they can live with defined benefit pension plans. A modern society cannot allow this “law of the downturn” to override contracts with the federal government, public law and established Canadian norms, standard of living and workers’ collective agreements negotiated over decades during which time the workers did their duty toward society by producing its social wealth.

This law of the jungle that these monopolies want to establish is not just a phenomena at Stelco/U.S. Steel. There is no end to what these blood-suckers will demand from the workers.

Several months ago we reported on a plant in Winnipeg that had agreed to a defined contribution savings plan for new hires in one set of negotiations, and three years later the company was back and wanted it also for employees with less than fifteen years service. Once workers are prepared to give their pension plan up, there is no end to what a company will demand. It has come to our attention from different publications that there is a concept being promoted by various companies to have “buy-downs.” For instance, the workers in a “GM parts plant in Saginaw, Michigan, where a worker making $18.50 will get a lump sum of $30,000 if he agrees to work for $14.50 an hour, or $40,000 if he goes down to a starting wage of $12. …”Skilled trades workers were given no option: they must take an $8 an hour wage cut, from $37 to $29, in exchange for a $50,000 lump sum. Skilled new hires will come in at $24. The article continues “With high turnover and a continuous stream of new workers, GM or its successor can enjoy the $12 an hour wage indefinitely.” The same article explains what the company is attempting at a stamping plant in Indianapolis employing 650 workers where GM wants the workers to reduce their wages from $29 to $14.65 an hour. The workers rejected this overwhelmingly, but now several months later the company wants to try it again.

The workers are doing their part through active resistance to these demands and trying not to feed the wolf. Where are the governments and politicians that are supposed to defend the well-being and security of Canadians by enforcing public right?

(For more information: call 905-547-1417 or e-mail rolf.gerstenberger@uswa1005.ca, or visit www.uswa1005.ca.

INFORMATION UPDATE 2010 #24

Recently members of Local 1005 and I attended a National Policy Conference in Toronto held the week of April 27^th, 2010. Delegates at this conference were Steelworkers from all over Canada.

The reason I am writing this article is to explain why this Negotiation Committee is fighting to keep all of our “hard fought gains” and the importance of a defined pension benefit plan.

At this conference the Steelworkers brought in a pension expert to talk about the difference between defined benefit pension plans versus the defined contribution savings plans and that the unions have to fight to keep the defined pension plans. At the end of the discussions there was a clear conclusion: a defined benefit pension plan gives you retirement security. You know what you are going to get when you retire.

A resolution was submitted and endorsed by all the delegates present which read:

THEREFORE BE IT RESOLVED THAT the USW support the CLC campaign called “Retirement Security for Everyone”.

BE IT FURTHER RESOLVED THAT the USW lobby for better protection of worker pensions, including creating benefit guarantee funds in the federal jurisdiction and all provinces.

BE IT FINALLY RESOLVED THAT the USW develop strategies to protect and expand defined benefit pension plans, secure and improve retirement benefits for members that do not have the benefit of defined-benefit pension plans, and develop educational materials for USW members that outline the need for and benefit of employer and government retirement funds for working people.

People elaborated the essential importance of these pension plans. That is why it is vital for the workers at Local 1005 to understand why all the other previous leaders of this Local negotiated this for us for today and we must fight to keep this for tomorrow.

For your information: There was a letter printed in the Hamilton Spectator on October 5^th, 2007 which clearly states that Stelco employees and retirees have nothing to worry about in regard to their pensions. The letter is by Gretchen R. Haggerty, Executive Vice-President and Chief Financial Officer, U.S. Steel Corp. This letter was written shortly before U.S. Steel took over Stelco.

“We want Stelco’s employees and retirees to know that we understand the fundamental importance of sound pension funding. We have had a large defined benefit pension plan for decades. We take our obligations very seriously and are proud of the fact that today that plan is fully funded. In fact, over the last four years, we have made over $700 million in voluntary contributions to that plan. We will honour our commitment to the Stelco pension plans. That is our history and track record. We look forward to closing the transaction, and to Stelco’s employees becoming part of U.S. Steel.”

We need everybody, active and retired members, politicians and members of the community to support us in our fight and make U.S. Steel live up to all of their obligations as they promised everyone.

I am asking everybody to stay strong and come out to the Information Meetings held every Thursday at 3:30 p.m. for the latest updates.

The Union gave notice to bargain on April 26th, 2010. We first met the company on May 20^th, 2010 and began meeting regularly on June 7. We have been in bargaining since that time. We are trying to reach an agreement that protects our entire membership: current, past and future. Neither the company nor the union has made a request to the Ministry of Labour for Conciliation Officer.

The attack by U.S .Steel on Local 1005 members (future, current and past) includes:

· Attack on the members in the plant. (Reduction of Cola, vacation and benefits)

“One for all and all for one” is more than just a slogan? What is in our common best interest? Not, “I’m okay; let’s abandon our senior brothers and sisters as well as our future brothers and sisters”. My senior brothers and sisters did not sell me out and I did not and will not sell out my junior and future brothers and sisters.

A defined contribution plan divides us. If we allow a defined contribution plan we are saying that my future brothers and sisters do not deserve what I receive. How long before the company approaches those brothers and sisters with “why should you care about them, they did not care about you, that’s why you are in a different plan”. How long do you think a plan with no future will last? Do you think the company wants a defined contribution plan because it is better for the workers? They do what is in their best interest, not ours. How can we allow the company to attack the most vulnerable?

Without indexing, Pensioners would lose almost 20% of their pension every ten years. Someone retiring now should do the calculation and see what this would mean for their pension 20 years from now. (This is the worry that every worker has before they retire: what will my pension look like in 20-30 years from now?)

We only receive and keep what we are willing to fight for brothers and sisters. The dignity of Labour lies in our fights for our rights and the rights of others.

With out the above we cannot be successful and we can never give enough up. Once you give up to the company, how long before they will be back for more and more.

We would like to clear up any confusion and relieve any concerns Stelco’s employees and pensioners may have about the security of their pensions on the closing of our transaction to buy Stelco.

U.S. Steel has agreed to significantly improve the security of the Stelco pension plans. We did so in two ways. First, we agreed to unconditionally guarantee pension funding obligations at the corporate (as opposed to Canadian subsidiary) level. Thus, instead of having to rely solely upon Stelco's ability as a stand-alone enterprise to generate the cash necessary to meet pension funding obligations, Stelco's employees and pensioners can now look to the strength of our entire company to do so. Second, we agreed to make an extraordinary payment of $32.5 million into the plans up front at closing. This is in addition to the pension payment schedule agreed upon by the Ontario pension regulator and Stelco.

In order to make our purchase offer, we asked that two provisions of the Stelco pension agreement be changed: The dividend restriction and free cash sweep.

These provisions made sense for Stelco as a stand-alone enterprise, but do not make sense if Stelco is part of an integrated company with a large and diverse shareholder base.

Moreover, given Stelco’s limited financial means as a stand-alone company, it was clear neither of these provisions would likely result in any meaningful contributions to the Stelco pension plans. By agreeing to amend these two provisions, the province of Ontario was able to require significant improvements to the security of the plans for Stelco’s employees and pensioners.

Of course, all laws that presently apply to Stelco will continue to apply, as will all other provisions of the Stelco pension agreement, including those provisions requiring pension contributions to fully fund Stelco’s pension plans by 2015.

We want Stelco’s employees and retirees to know that we understand the fundamental importance of sound pension funding. We have a large defined benefit pension plan for decades. We take our obligations very seriously and are proud of the fact that today that that today that plan is fully funded. In fact, over the last four years, we have made over $700 million in voluntary contributions to that plan. We will honour our commitment to the Stelco pension plans. That is our history and track record.

We look forward to closing the transaction, and to Stelco’s employees becoming part of U.S. Steel. Gretchen R. Haggerty, Pittsburgh, Executive Vice-President and CFO U.S. Steel

INFORMATION UPDATE 2010 #23

U.S. Steel is demanding concessions from its workforce at Hamilton Works. These concessions include the demand that new hires be placed in a defined contribution savings plan, thus ending over 50 years of workers having a pension plan; the demand to eliminate the pension indexing formula for the over 8000 pensioners; the demand to stop covering the health benefits for the over 180 members of the plan who have exhausted the $70,000 limit on benefits. As well they are proposing that the maximum vacation time a worker will have is five weeks from the present 7 weeks, and they want to change the cost of living formula such that a worker would receive about 20% of what the previous formula paid.

According to the arguments by the big corporations, the media, various intellectuals and gurus, when workers give up concessions this will make the corporation more competitive, both in Canada and internationally. When the argument is followed to its conclusion, the reasoning goes like this: if the workers work for lower wages, give up their pension plan, give up their indexing, etc., the “costs” to the company are less and therefore the company can then sell their steel for less money, and compete more effectively. The workers are told that it is there duty as loyal company employees (and sometimes as patriotic Canadians) to do whatever is necessary to make their company competitive. They are told that this is what will protect their jobs.

Anyone who does not agree to this is labeled a troublemaker and someone who does not care about the company and wants to crater the company, and is even unpatriotic.

Workers work in the factories, use machines that consume raw materials, and at the end of the process a finished product results. (At Stelco, iron ore, coal, various fluxes for the furnaces, hydro, water, etc. are the raw materials that are consumed. We have many types of machines, like blast furnaces or basic oxygen vessels or rolling lines that consume the raw materials. The end product is a coil of steel that is then sold to the auto companies, for instance.) It is the workers labour that creates value. At the end of the process, the steel that is shipped off to the car companies has more value than all the inputs. This new value is what everyone is fighting over.

So much of this value is used to pay the wages and benefits of the workers and pensioners. So much is used for interest payments to the banks or financial institutions who hold the debt. So much goes to the various levels of government as taxes to pay to run the government or for social services. So much goes to the “owners” of U.S. Steel through salaries or dividend payments, etc.

The monopolies agenda to force the workers to give concessions is designed to insure that the owners and the financial institutions can get more of the value that is produced by the workers. This whole offensive against the workers led by the monopoly media and the various gurus is designed to hide the fact that they need to convince the workers and the society that “What is Good for U.S. Steel is good for the workers!” Concessions mean one thing: more of the value that the workers create goes into the pockets of the owners and financial institutions and less goes into the pockets of the workers and pensioners, and if the corporations have their way, less goes into the government coffers as well.

The steel industry has a problem that many industries do not face. It is very capital intensive. Huge investments are required to build a steel plant and to keep it modernized. As well, huge sums of money are required to keep the industry running. John Surma, the CEO of U.S. Steel announced in a recent speech that over 70% of their cost of production to produce a ton of steel is spent on raw material costs (iron ore and coal). The industry also carries a large debt. By their last financial result, U.S. Steel carries a debt of almost $4 billion which has to be serviced.(It should be mentioned here, that last year, when U.S. Steel’s Canadian operation was shut down and almost everyone laid off, the banks and financial institutions received all of their interest payments.) All the U.S. Steel shareholders also put pressure on the corporation to increase their dividends. All these factors mean that the rate of profit in the steel industry is not as high as it is in other sectors of the economy. This is what is behind the insatiable demand by these corporations for concessions. They all want their pound of flesh off of the workers.

Rolf, whatever we do, do not lose the indexing of the pensions. This is the only increase pensioners have to keep up with inflation and the high costs of taxes and government costs. As well as our benefits which are an important need in our aging society. We have fought for these benefits and gains through many negotiations and years of our struggle in the labour movement. I wish you a lot of success in these very important set of negotiations; as always, it is a hard fought battle against these corporate thieves. You have the support of every living pensioner as well as every worker who has fought all their life to maintain dignity and respect from the society that we have built with the struggles of our sweat and toil. Thanks for your time Rolf. I wish you as well as the negotiating committee all of the best, and may we be victorious in our battle against these capitalistic corporate slugs.

The media today is full of reports that Dwight Duncan, the Ontario Finance Minister will meet tomorrow with public sector employers and the public sector labour leaders. The provincial government has been actively campaigning for quite some time now, and especially since the provincial budget in March, that they are going to freeze the wages of the public sector workers and demand that they workers accept drastic changes in their working and living conditions.

It should be pointed out that one of the main arguments they use against the public sector workers is that “the private sector workers had to take concessions and many lost their jobs” so it is not fair that the “public sector” workers should not be affected by the economic crisis. This is a shameful attempt to try to pit worker against worker. The private sector workers are supposed to stand idly by while everyone is being attacked.

What they want to leave out of the equation is that the public sector workers provide essential services to make this province run (teachers, nurses, city workers, etc.) . The province is taking these measures to attack the workers and insure that the wealth that is created in Ontario goes to service the needs of the rich in Ontario and not the workers who created the wealth.

This is for information purposes to try to help explain what the Legal process is for Collective Bargaining in Ontario.

The Union gave notice to bargain on Apr 26th, 2010. We first met the company on May 20^th, 2010 and began meeting regularly on June 7. We have been in bargaining since that time.

Conciliation officers are Ministry staff, who help the parties come to an agreement. (To date this process has not taken place and the Union would be contacted as soon as US Steel requests these services)

· If conciliation is not successful, the officer advises the Minister of Labour, who issues a “NO BOARD” report and sends it to each party.

· 17 days after the date of the Minister’s “ NO BOARD “ report and after the expiry of the collective agreement, at that point, we could be legally locked out. Likewise, the current contract is not in effect, and the company could alter working conditions.

We will advise the membership as soon as the process begins and until then we are working under the terms of the current Collective Agreement.

`INFORMATION UPDATE 2010 #22 -July 15, 2010

Coming out of 1990 bargaining, the company and the union agreed to an indexing letter whereby pensioners pensions would be increased each August 1 based on a formula the was based on the Consumer Price Index(CPI) and how well the pension plan performed. We are including a chart which lays out what the percentage increase for each year was from 1991 until 2009(the increases ranged from 0% to 3.1%, and the increases are rolled-in.). We also are including the calculations of what a pensioner who received a $1000 per month pension in 1991would receive each year after that. In 2009 this pensioner would be receiving a pension of $1,366.85. The calculations are done every August 1, the pension is increased and then the company has to fund the pension plan (according to the rules of the Pension Benefits Act) to insure that this increased pension amount is properly funded.

The company wants the union to agree to give up this indexing arrangement, replace it with a % formula, that is not rolled-in, and is not paid out of the pension plan. They are preparing to eliminate indexing altogether for pensioners. This is also what they hope to achieve with their proposal to put all new hires in a defined contribution savings plan instead of a pension plan. Their plan is, even if they don’t eliminate indexing for pensions at this time, by the time the next contract rolls around, they are hoping that a majority of the workforce is in a savings plan, and they will just eliminate indexing then.

Just to sum up, using the figures from the chart, pensioners would lose almost 20% of their pension every ten years without indexing. Someone retiring now should do the calculation and see what this would mean for their pension 20 years from now. (This is the worry that every worker has before they retire: what will my pension look like in 20-30 years from now?)

INFORMATION UPDATE 2010 #21

15 YEARS OF TRYING TO GET STELCO AND US STEEL TO LIVE UP TO THEIR PENSION OBLIGATIONS!

It is reported that the workers at Vale Inco accepted a Defined Contribution (DC) Savings plan for new hires. A DC savings plan for new hires was also accepted by the workers at Lake Erie Works in April. Some people are suggesting that now the workers at Local 1005 have “no choice” but to agree to a DC plan for new hires. It should be pointed out that we were also told during the CCAA process that Local 1005 had “no choice” but to agree to the CCAA scam. By opposing the CCAA process from the beginning we were successful in not losing anything. In a way, what is necessary is to say No! to the attempts by these large corporations to wipe out the workers’ pension plans.

Local 1005 USW has been dealing with the pension issue since 1997 when the union first became aware that Stelco had not been making their solvency payments (payments which were designed to protect workers’ pensions in case a company went bankrupt). Stelco applied to stop making these payments six weeks after the contract in 1996 was ratified. From that time the company has been trying by one way or another to deal with the “pension problem.” The union has been opposing these attempts by the old Stelco first by fighting for two and one half years at the Ontario Labour Relations Board. During the CCAA process started by the old Stelco on January 29, 2004, the company and the CCAA court were trying to get Local 1005 to participate in changing the pension arrangement in one way or another. Local 1005 kept saying we had a contract and expected everyone to live up to the terms of the agreement. The point here is that Local 1005 has been fighting for over 15 years to protect the pensions and indexing of pensions for its members and pensioners.

U.S. Steel also wants to have a DC savings plan for new hires. They also have a proposal that Local 1005 eliminate the pension indexing letter. (In calculations we published several months ago, the pension indexing letter was won after the 1990 strike. A pensioner who was receiving a $1000 a month pension in 1991, would be receiving $1366 a month in 2009-2010. That is, without indexing, a pensioner would have lost almost 40% of his/her pension in 20 years. For a worker receiving $1000 a month, an extra $366 a month makes a big difference in ones standard of living.) If the union were to agree to give up the indexing, we would insure that the workers retiring now would lose about 40% of their pension if they live 20 years or longer after they retire.

WHAT IS THE CONNECTION BETWEEN A DC SAVINGS PLAN FOR NEW HIRES AND PENSION INDEXING?

These demands by the company are well thought out. The demand for a DC savings plan for new hires sounds innocent enough. These workers are not even in the workforce yet. And if this is the employment contract, they know what it is going in, so what is the big deal?

But think about this. The new hires come in and are not part of the pension plan. The company will have to hire several hundred new workers in the next few years if the plant is to operate. By the time the next set of negotiations take place, as many as one half of the workforce will be in the savings plan. U.S. Steel will again have the demand that the workers in the plant should agree to give up indexing for the pensioners (or as the LEW agreement states” the company will no longer index pensions.”) The company than is counting on the workers who are not part of the pension plan voting to eliminate indexing of pensions for over 8000 pensioners.

What appears innocent means the end of the pension plan which 1005 members have been part of since 1956. What appears innocent ends up being a huge problem for workers who want to retire.

In the contract highlights document dated July 8, 2010 handed out to the Val Inco workers, under the heading “New Defined Contribution Pension Plan”, after laying out what the terms of the savings plan will be for new hires, it also points out that “1. All current employees will continue to participate in the existing Defined Benefit pension plan unless the employee voluntarily opts for participation in the new pension plan effective Date of Ratification.”

“The Union strongly recommend that you seek proper advice before contemplating opting into the DC pension plan as making this election may have a significant impact on your retirement income.”

(Note: It is a misnomer to label the Defined Contribution plan a pension plan. It is a savings plan, where a certain amount of money is negotiated to be put in the plan (the defined contribution) but no one can tell the worker how much of a pension they will get at the end. It all depends on the market, the investments, etc. and at the end hopefully the market hasn’t collapsed when the worker is ready to retire.)

The above disclaimer reminds us of the advertisements on TV for certain medicines, where the ads spend most of their time warning the customers about the dangerous side-effects of the medicine, sometimes causing death. How can someone recommend that workers can go to a savings plan but they better check with a “financial adviser” because the savings plan “may have a significant impact on your retirement income.” How can unions agree to savings plans knowing that the plans “may have a significant impact on retirement income”?

The demand of the society is that everyone should have a pension that they can retire at a Canadian standard of living. The Canada Pension Plan (CPP) and Old Age Security are inadequate to provide anything but a retirement in poverty. It would greatly assist in pressuring the federal government to increase the CPP if the workers with Defined Benefit Pension Plans fight to strengthen their plans, so that their companies pressure the federal government to increase CPP so that workers can have a decent retirement. If the workers with DB plans give up their plans for savings plans, the business community will have no interest in strengthening the CPP.

The battle to increase the CPP does not make sense if the organized workers are giving up their DB pension plans all across the country. We want everyone to have a decent retirement. And on this, it is important that the older workers look after the younger generation and insure that their retirement is looked after also. It is unconscionable that workers are deciding that “new hires” can be sacrificed to the bottom line of the huge multi-national conglomerates like Vale Inco, US Steel, Gerdau, etc.

INFORMATION UPDATE 2010 #20
July 5, 2010

COMPANIES ARE DEMANDING THAT THE UNIONS
ATTACK THE MOST VULNERABLE!

The Local 1005 USW contract with U.S. Steel Canada expires on July 31, 2010. The formal negotiating
process began on May 20, 2010, with the Local 1005 negotiating committee meeting with the company
negotiating committee almost every day since June 7. Several issues have come to the fore in these
negotiations which are issues all across Canada and in North America.

First of all, a trend began to develop in the early 2000’s where over 240,000 steelworker pensioners in
the U.S. had their pensions reduced by anywhere from 10-70%. Various steel companies either filed for
bankruptcy or used Chapter 11 and used the Pension Benefit Guarantee Corporation (PBGC) to reduce
the pensions. What this created was a taste by these corporations (one of which is now the largest steel
company in the world, ArcelorMittal) for the huge profits that can result if companies no longer have to
look after pensioners.

These companies no longer wanted to have workers in a defined benefit pension plan. They started to
develop various savings plans; either called 401(K)’s in the U.S., pension trusts of various kinds, or
defined contribution savings plans. All these plans promised workers huge sums of money after working
30-40 years, but after the various collapses of the stock markets, financial markets, market meltdowns,
etc., not many people believe that these savings plans guarantee anything except uncertainty and
insecurity in retirement. These companies are going full out to convince workers and their unions to give
up their pension plans in exchange for savings plans. Companies no longer want to have any
responsibility for workers’ pensions, since they believe that this part of the value the workers create
firmly belongs in the pockets of the rich rather than with the pensioners.

These companies are testing the workers in every workplace. Are the workers prepared to sacrifice the
pensioners who have worked 30-40 years and agree to take away or reduce their pensions, their
indexing, and their health benefits? Can the workers in a plant be scared, bought off, cajoled or bullshitted that shafting the pensioners is no big deal, at least it will “save jobs” and make the plant
“viable”? The corporations know that if they can get the unions and the workers to agree to this, it is
then unlimited what workers will agree to, to “save their jobs!”

Or what of this scenario. In order to get the workers to agree to wipe out the pension plan, let’s just start
by doing it for “new hires.” This seems innocent enough. After all, these new workers aren’t even here
yet to vote on whether they want a pension plan or a savings plan. Here again, it almost appears that the
corporations want to see what the workers and their unions will agree to. If they are ready to give up
over 50 years of bargaining and fighting for a pension plan and agree to give it up “only for the unborn”,
for the future, “what else can we do to the workers”?

Or what if the corporations ask the workers and their unions to agree to cut off health benefits for those
workers who are really sick? Again it is almost as if the corporations want to see if the unions and the
workers will agree to shaft the sick. After all, if the workers and the union will agree to do this, what
else will they agree to do?

For your information: In a December 2003 Globe and Mail Article about what was happening to the
steelworker pensioners in the U.S. , a union official in the U.S. was quoted as saying that they had tough
choices to make. Think of it like this. If your house was burning and you have four kids, you have to
pick two kids that will burn and two you will save. They decided to save the jobs in the plant and burn
the pensioners!

This is definitely not the ideology of the working class. Even on the level of parenting, what parent
wouldn’t do whatever they could to save all four of the kids, or die trying? Who could live with
themselves if they made a decision to save two and consciously let the other two burn! Unfortunately
some of the cutthroat ideology of the rich has crept into the labour movement.

The only response to any of these demands is to say no, and no means no!

For your information: There is an old saying from up North and in the bush: DON’T FEED THE
WOLF!

Do not underestimate what U.S. Steel is up to. They are trying to determine what the situation is
amongst the workers at Stelco. They have demands for concessions. They want to see what the union
and the workers will agree to. Will they sacrifice the pensioners? Will they sacrifice the unborn? Will
they sacrifice the sick? If they can get the workers to agree to this, what makes anyone think they will
stop there? Once you feed the wolf, what will prevent the wolf from coming back for more?

Our position is nobody, including the most vulnerable and those not yet members will be left behind or
in any manner considered second class with fewer rights. It is objectionable of the capitalists to try to
divide the working class by introducing a sense of privilege to this or that sector. Canadian workers
know from their direct experience that they cannot defend themselves if they are divided based on
privilege or any other way. To throw certain workers to the wolves because they are vulnerable because
they are sick or injured or yet to be hired is not a practice of the working class but one that originates in
the class privilege of the owners of capital. We cannot allow the bad practices of privilege and
egocentrism (“I’m all right, Jack”) infect our ranks. Our slogan is “All for one and one for all!”

What is needed to make Hamilton Works Viable?

There has been much discussion lately on what is necessary to make U.S. Steel Hamilton Works viable.
We feel that what is needed in Hamilton is 1) First of all; the Hamilton Plant needs a hot strip mill.
Hamilton Works is most likely the only integrated steel facility in the world that cannot take a slab off of
the caster and put it one the 4-stand in the cold mill to be rolled, without first having to leave the plant.
Our slabs are now being shipped to various U.S. Steel plants in North America, and the coils that come
back to be rolled through the 4-stand and then the Z-line also come from all over North America. Steel is
one of the most expensive commodities to ship because of its weight, so this shipping of steel all over
North America is a huge waste of resources, and an unnecessary expense. 2).The Hamilton Works also
has hundreds of contractors employed in any one day. The wealth that these contractors produce goes
first of all to the contractor company, and then to U.S. Steel. This also makes it difficult to have a viable
steel plant. 3) It is next to impossible to have a profitable steel plant unless it is producing at over 8590% capacity. 4.) Unless there exists a steel marketing board, to control the insane fluctuations in the
selling price of steel, it is very difficult to ever have a consistently profitable steel plant.

What is disturbing for the workers at Local 1005 is that no measures are being taken to address the
above issues, which are true structural problems, but rather it is presented that if only the workers agree
to shaft the pensioners, the new hires and the sick, somehow this will turn things around. It must not
pass.

(For more information: call 905-547-1417 or e-mail rolf.gerstenberger@uswa1005.ca, or visit www.uswa1005.ca.

This is a charity tournament to raise money for Hamilton Food Share. Prize distribution and steak dinner on completion of the tournament will take place at the Hamilton Steelworkers Centre located at 1031 Barton Street east.

Your participation in the tournament and your contribution of either prizes or monetary donation is solicited. Thank You!

Spots will not be reserved unless your cheque is included with your registration form.

The 2008 Local 5328 / Arcelor Mittal Children's Christmas Party was a huge success with over 63 children and their families taking part.

We'd like to thank Santa for taking time from his busy December schedule to join us for this fun filled day and the Clown was also terrific. Special thanks to Irene Boutilier, Jennifer McLean, Gail Pickard-Ross, Neil Boden, Terry and Tammy Willock for their help in purchasing and wrapping the gifts.

03/07/11

INFORMATION UPDATE 2010 #3 : October 12, 2010

INFORMATION UPDATE 2010 #24

INFORMATION UPDATE 2010 #23

`INFORMATION UPDATE 2010 #22 -July 15, 2010

INFORMATION UPDATE 2010 #21

The 2008 Local 5328 / Arcelor Mittal Children's Christmas Party was a huge success with over 63 children and their families taking part.

The following pictures capture some of the fun had by all: