Algoma, USW Local 2251 Extend Labor Talks, Narrowly Avert Strike

A previous labor contract expired on July 31, 2022.

“This extension demonstrates the willingness of the parties to work towards an agreement that provides fair and equitable improvements to wages and benefits and supports our collective future under the electric arc transformation,” Algoma Steel president and CEO Michael Garcia said in a statement.

USW Local 2251 represents hourly production workers at the Canadian sheet and plate producer. USW Local 2724, which represent salaried workers, ratified a new labor agreement last week.

Ninety-one percent of Local 2251 members voted to strike on Saturday while talks with the company were still ongoing, Da Prat told SMU.

Why was the strike vote taken even while both parties were still at the bargaining table?

Unions bylaws require that a strike vote occur prior to the expiration of a contract. Another reason: “Because we felt like we were getting nowhere in the negotiations – up to and including Saturday afternoon,” Da Prat said.

Local 2251 and Algoma were at the last minute able to come to an agreement on cost-of-living adjustments (COLA). That is what made the 15-day bargaining extension possible, he said.

“They said what they wanted, and we said ‘no’. And we resolved that issue, and that allowed for talks to continue,” Da Prat said.

Other issues remain unresolved, including wages, some benefit matters, and how to handle potential job losses associated with Algoma’s planned switch from blast-furnace steelmaking to electric-arc-furnace (EAF) steelmaking.

Algoma has said the move to EAF route is necessary to reduce carbon emissions. It plans to decommission and demolish its two blast furnaces after new EAFs are up and running in 2024.

Iron ore and coking coal are required to make steel via the integrated route. And Local 2251 is concerned about the hundreds of jobs that could be lost at the steelmaker’s coke ovens and in related services. Coke batteries won’t be necessary at Algoma once the move to the EAF route is complete.

Da Prat estimated that as many as 600 union members could lose their jobs. “The company will say there will be attrition. Yes, obviously there is going to be attrition. But there will be a significant number that will need to find work,” he said.

Local 2251 would like to make up for some of those anticipated job losses by “repatriating” jobs to union members that have been outsourced to contractors, Da Prat said.

The next steps: If a tentative labor agreement is reached, then Local 2251 members will vote on whether to ratify it. And if one is not reached? “In 15 days, we would be in a position to go on strike,” he said.

Talks between Algoma and the USW are one of three sets of ongoing negotiations between the union and steelmakers in the US and Canada.

Talks are also underway at Hamilton, Ontario-based Stelco, where a prior labor contract with the USW expired at the end of June.

Negotiations are in addition taking places between the USW and domestic steelmakers US Steel and Cleveland-Cliffs. Union contracts with the two US mills won’t lapse until Sept. 1.

By Michael Cowden, Michael@SteelMarketUpdate.com