Algoma, USW Local 2251 Avert Strike, Lockout Through Sept. 1

The union has scheduled ratification votes on the contract from Aug. 29-Aug. 31. The practical effect is that there will be no strike or lockout until the ballots are tallied.

“If ratified, this agreement will help to secure our collective future, provide for sustained profitability even at the bottom of the steel cycle,” Algoma president and CEO Michael Garcia said in a statement on Friday, Aug. 12.

But Local 2251 president Mike Da Prat lambasted the company’s final offer.

“If members vote the offer down, we are on strike. If they vote it in, we have an agreement. The negotiation committee is giving a strong recommendation to turn it down,” Da Prat said in an email to SMU on Friday.

The Timeline

A new labor agreement between Algoma and Local 2251 would replace a prior contract that expired on July 31. Algoma and the union avoided a work stoppage at the last minute and agreed to extend talks for 15 days past that deadline.

That extension had been set to expire on Monday, Aug. 15, at 11:59 p.m. – at which point the USW could legally go on strike and Algoma could legally lock out union members. Both sides agreed that they would not resort to such measures with a ratification vote pending.

“All members of Local 2251 should report for work on August 16, 2022, continuing until the result of the vote is known,” the union said in an update to members on Friday.

“While we would be in a legal position to do so, the company does not intend to lock them out,” an Algoma spokeswoman said in an email to SMU on Friday.

The Issues

Algoma sees its last, best, and final offer as a win-win for the union and the company as it transitions from integrated steelmaking to EAF steelmaking.

Key features of the deal are a “top-of-market” wage and benefit package that would include a 5.5% wage increase, continued cost of living adjustments (COLA), as well improved pension and retiree benefits, Garcia said.

COLA has been a hot-button issue with inflation running at its highest levels in decades.

Union members will also receive a signing bonus “contingent upon no disruption to operations and uninterrupted shipments to our customers,” he said.

Local 2251’s negotiating committee maintains its opposition to the proposed contract. It will hold a meeting on Thursday, Aug. 25, with union members to discuss the details of the proposed deal. And it will recommend a strike.

“The meeting is to inform the members and to clearly demonstrate that the offers are unacceptable and to provide the members the negotiating committee’s recommendation to reject the company’s offer and to go on strike,” the union update said.

Algoma is unusual in that both its salaried and hourly workforces are unionized. USW Local 2724—which represents Algoma’s salaried workers—in late July ratified a new labor agreement with the steelmaker, with 59.9% of its membership voting in favor of the new deal.

The company makes hot-rolled and cold-rolled coil as well as plate for both the US and Canadian markets. It is an important supplier to the upper Midwest and the Great Lakes regions.

Recent developments mean a reckoning at Algoma could occur at about the same time that a much more significant round of labor talks in the US are coming to a head.

USW contracts with US Steel and Cleveland-Cliffs – both much larger, US-based steelmakers – are set to expire on Thursday, Sept. 1.

By Michael Cowden, Michael@SteelMarketUpdate.com