USW in Legal Position to Strike Stelco Lake Erie Works on Aug 22

The union said it had received a “no-board report” from the Ontario Ministry of Labor on Friday, Aug. 5. The development triggered the legal strike date.

“We will be updating the membership with new information as it becomes available,” Local 8782 said.

A no-board report is issued when a government conciliator from the Ontario Ministry of Labour determines that a company and a union can’t come to terms for a new labor agreement. Approximately two weeks after that happens, the union is in a legal position to strike – and the company is in a legal position to lock out workers.

“We continue to work towards a fair contract for our members in hopes that a strike is not needed,” Local 8782 president Randy Graham said in an email to Steel Market Update on Monday, Aug. 8

A similar development occurred in late July at USW Local 1005, which represents Stelco’s Hamilton Works in Hamilton, Ontario. USW Local 1005 is in a legal position to strike as of Tuesday, Aug. 16.

“We have only asked that you be compensated relative to other workers in the steel industry,” Local 1005’s negotiating committee said in an update to members last week, noting that Stelco has been “extremely successful and profitable” in recent quarters.

“Although we are far less optimistic of avoiding a labor dispute today than we were 4 months ago, there is still time for Stelco to re-engage in meaningful talks and negotiate,” the committee said.

A strike or lockout at Local 8782 would probably be more disruptive.

Lake Erie Works is an integrated steel mill. Its furnaces make liquid metal, and its hot-strip mill makes hot-rolled coil that can be further processed into pickled-and-oil (P&O), cold-rolled or coated products.

The mill, which employs roughly 1,200 union members, is Stelco’s only steel-producing facility.

Steelmaking operations at Hamilton Works, represented by Local 1005, have long been shuttered. Hamilton’s “Z-line,” which makes galvanized and galvannealed products, remains operational. But such downstream products require a stable source of hot band – one typically provided by Lake Erie Works.

If Lake Erie Works were to stop running, it’s not clear where Stelco would source the hot-rolled coil necessary to make downstream P&O, cold-rolled and coated products.

Stelco did not respond to a request for comment for this article on Sunday, Aug. 7.

Negotiations at Algoma, Cliffs and US Steel

Labor negotiations are also underway at Algoma, another Canadian flat-rolled steelmaker. The Sault Ste. Marie, Ontario-based company and USW Local 2251, which represents hourly production workers, extended talks and narrowly averted a strike last week.

Local 2251 in an article in local publication SooToday.com said that extension officially expires at 11:59 p.m. on Monday, Aug. 15.

They agreed to a 15-day extension of talks. “This extension demonstrates the willingness and desire on both sides to reach a fair and equitable agreement for operations of the facilities today and throughout the transition to electric arc steelmaking,” Algoma CEO Michael Garcia said on an earnings conference call with analysts last Thursday. He declined further comment citing the sensitivity of the talks.

USW contract negotiations are also taking place between the USW and US steelmakers Cleveland-Cliffs and US Steel. Contracts between the US mills and the USW don’t expire until Sept. 1.

In Canada, in contrast, Stelco’s contract with the USW expired at the end of June. And Algoma’s contract with Local 2251 expired at the end of July. That has made the stakes higher and the brinksmanship around possible labor actions potentially more disruptive.

By Michael Cowden, Michael@SteelMarketUpdate.com