On October 29, 2013 U.S. Steel Corporation, a U.S. giant monopoly headquartered in Pittsburgh, Pennsylvania with worldwide operations announced that it would permanently shut down the iron and steelmaking operations which it controls at Hilton Works on December 31, 2013, thus ending over 100 years of steelmaking activities in the city of Hamilton.
U.S. Steel CEO Mario Longhi made the announcement in Pittsburgh during a conference call with investors to discuss the company’s third quarter financial results. “Decisions like this are always difficult, but they are necessary to provide the cost structure of our Canadian operations”, he said. As a result of the closure, “U.S. Steel will record a noncash charge in the fourth quarter of approximately $225 million to write down these assets, but it will ultimately result in annual savings of roughly $50 million”, he pointed out.
The mills to be closed have been idled by U.S. Steel since October 2010 which drove hundreds of unionized steelworkers onto the unemployment lines. The permanent shutdown is expected to affect the 47 remaining non-union workers who are currently overseeing the facility. That leaves approximately 600 steelworkers, members of Local 1005 USW, and about 228 salaried positions at the Hamilton plant. According to Sarah Cassella, a spokeswoman for the giant monopoly, U.S. Steel will continue on with its coke and finishing operations that are currently active at the plant.
Aside from the permanent closure of iron and steelmaking at Hilton Works which effectively marks the end of Canadian steelmaking, Longhi also announced that U.S. Steel will be ceasing operations at two of its oldest coke batteries at Gary Works in Gary, Indiana and dissolving Double Eagle Steel Coating Co., its joint venture with Severstahl North America. These actions are said to be part of the Longhi-led Project Carnegie, a supposedly “value-enhancement initiative aimed at creating drastic improvements on cost and revenue”. According to the Pittsburgh Business Times, Longhi said these announced cuts will create an excess of $75 million in operating benefits for the company and that U.S. Steel would continue to work on many other fronts to find additional savings as part of its Project Carnegie.
U.S. Steel acquired the integrated steelmaking operations in Hamilton when it bought Stelco, one of Canada’s largest steel manufacturers, in 2007. The purchase was made a year after Stelco fraudulently filed for bankruptcy as a way to get out of its obligations towards the steelworkers and pave the way for the takeover. The Stelco purchase was the last of a series of buyouts of major Canadian steel makers in the 2000’s that eliminated Canadian ownership of such Canadian names as Algoma Steel Inc., Dofasco Inc., and Ipsco Inc.
As part of the Stelco purchase, U.S. Steel was obliged under the 1984 Investments Canada Act to show that the takeover would provide a “net benefit” to Canada. U.S. Steel pledged at the time to invest at least $200 million in its Canadian facilities, to produce an average of 4.3 million tons annually over a three-year span, and to employ an average of 3,105 workers.
However, on March 3, 2009 U.S. Steel announced that it would be temporarily shutting down its Hamilton plant and most of its Lake Erie plant putting close to 2,000 workers out of work. This announcement came just 4 months after U.S. Steel laid off 700 workers at the Hamilton plant when it shut down its blast furnace. A second shutdown of the Hamilton plant took place on October 1, 2010. With such flagrant violations of the binding commitments made under the Investments Canada Act and after vigorous opposition by the steelworkers and overwhelming condemnation by the community, the Harper government was forced to launch legal proceedings against U.S. Steel to fine it $10,000 per day beginning from November 1, 2008—a pittance for the U.S. giant monopoly.
However, rather than enforce the law and hold U.S. Steel accountable, the Harper government struck a secret deal that abruptly ended the court case. Promises of jobs and healthy production levels were abandoned. Workers, pensioners and communities devastated by U.S. Steel’s behaviour were denied their day in court.
Ever since the takeover, the steelworkers have been saying that U.S. Steel is sabotaging steelmaking operations in Canada and wrecking the Canadian economy in order to boost its other plants in the U.S. and those it owns around the world. At the time of the takeover, Stelco constituted a very significant competitor for U.S. Steel and purchasing it gave U.S. Steel greater control over steel markets in Canada and in the world along with the power to decide which country would produce steel.
Indeed, this amounts to a deliberate destruction of the Canadian economy as steelmaking is the basis for the manufacturing of countless necessities and is crucially needed for the building of Canadian infrastructures. Without steelmaking, the manufacturing of the very means of production required to sustain the Canadian economy is impossible and also threatens the Canadian ability to sustain life itself. Without steel, nothing can be produced. This is why the permanent closure of iron and steelmaking operations at Hilton Works greatly concerns postal workers and the entire working class for that matter. This decision by the U.S. Steel giant monopoly is a slap in the face of the Canadian steelworkers and of the Hamilton community who have been fighting together against U.S Steel and its wrecking of the Canadian economy since its takeover of Stelco.
As it now stands, steel imports rose to $12.2 billion in 2012 which amounts to a steel trade deficit of $4.6 billion. While steel imports have been growing, no significant new steel capacity has been developed in Canada and now Canadians are faced with the destruction of capacity at Hilton Works and threats against Lake Erie Works. Import penetration in the Canadian steel market is now at 65% and is being done predominantly by the United States.
The steelworkers have never sided with one set of monopoly capitalists over another and have always taken just positions in favor of a new direction which would guarantee the flourishing of our national economy. They have unequivocally blamed Stelco’s greedy capitalists and other monopoly capitalist looming vultures such as U.S Steel at the time of the takeover including the Harper government for the systematic destruction of the Canadian steelmaking industry, whereby all of these unprincipled monopoly defenders have shamelessly acted with impunity against public right and in favour of global monopoly right.
In recent years, contract negotiations between steelworkers both at Hamilton Works and at Lake Erie Works have been marked by incredible abuse from U.S. Steel and the full force of its corporate power and resources to impose its will under threat of arbitrary and lengthy shutdowns. In each instance, the workers refused to be provoked into a strike. To their credit, they proposed to keep operating their plants while pursuing a settlement through good-faith negotiations aided by government mediation.
U.S. Steel’s agenda dictated otherwise. In 2009-2010, it locked out the steelworkers at Lake Erie Works for eight months then imposed an 11-month lockout in Hamilton in 2010-2011. Since April 28, 2013 it has been enforcing another lockout of 1,000 steelworkers, members of Local 8782 USW, at Lake Erie Works in Nanticoke after workers voted 70% to reject the giant monopoly’s contract offer. 92% of the USW membership took part in the vote.
Union leaders say that “time after time, the Harper Conservatives have demonstrated they stand with giant multinationals that abuse their dominant economic power to drive down our working and living standards and eliminate good jobs. It is part and parcel of the Conservatives’ low-wage economic strategy for our country”.
They also point out that “earlier this year, without meaningful public debate or consultation, the Harper government decided to arbitrarily amend the Investment Canada Act. The Conservatives’ changes weaken the Act. They allow for more foreign takeovers to be rubber-stamped. Secret deals will remain the norm. Neither the government nor multinational corporations will be required to consult with, or be accountable to, the Canadian working families and communities directly affected by foreign takeovers”.
Thus far, the Harper government has refused to intervene and force U.S. Steel to continue its iron and steelmaking activities at Hilton Works in Hamilton despite growing demands that it must do so. Industry Minister James Moore`s office said that the government does not get involved in any company`s day-to-day decisions.
USW union leaders representing the steelworkers have been quoted in a recent Local 1005 Information Update #37 dated November 14, 2013 as saying: “Using Hamilton’s coke oven to feed American steel mills rather than to produce steel in Canada may be a rational business decision for U.S. Steel’s continental operations. But it is a bad decision for the Canadian economy and Canadian workers. Ottawa’s lack of response to U.S. Steel is not only deeply disappointing to Hamilton steelworkers as it sets a terrible precedent for other foreign-owned enterprises in Canada. We should maintain and improve Canada’s steelmaking capacity.”
According to Wikipedia, U.S. Steel recorded revenues of US$ 17,374 billion in 2010 and assets totalling US$ 15, 350 billion. Its shares went up by 9 per cent after the cuts were announced.
The following is an article written by Rolf Gerstenberger, President of Local 1005 USW, who represents the workers at Hilton Works. The article appeared in the local’s Information Update #35, October 31, 2013. Further information regarding the closure of the Hilton Works in Hamilton by U.S. Steel can be obtained by visiting their website.
ARE WE A COUNTRY OR NOT?!
On behalf of present and former members of Local 1005 USW, I wish to express deep regret and anger at the announced permanent closure of steelmaking at Hilton Works which has been in operation our entire lives and has made Hamilton what it is today.
This is a dagger into the heart and soul of our community. The hand on this poisonous blade stretches from Pittsburgh but it has been guided into our chest by the federal and Ontario governments. They have the power to say no to this attack on Canada’s economy. They have the power to beat back this invasion of destructive robber barons whose private self-interest has nothing good to offer Canada.
Harper speaks constantly of national security and protecting Canadians from terrorism and degenerate social values. But when it comes to protecting them from this wrecking of Canadian livelihoods, steelmaking and security in retirement, which amounts to a form of U.S. terrorism, his government says it is a private decision and it cannot intervene! Some people wonder how different has this been than if the U.S. military marched into Hamilton and blew up our mill with shells and bombs? They have ripped two million tons of annual steel production out of our economy. How is this value to be replaced? Through imports. Those imports of steel drain our economy of value because we as a country, we as our own economy have an under supply problem in steel, not one of oversupply.
Harper’s anti-Industry Minister James Moore said U.S. Steel’s wrecking of Hilton Works is a business decision and that the government does not get involved in the day-to-day decisions of any company. Then why does the Conservative Party call itself the government of Canada? We need a government that defends Canadians, not a gang of toadies who nod off to sleep while global monopolies do whatever they want. All of it is justified under the hoax of defending democratic freedom which allegedly requires governments which do not intervene in business decisions. What a self-serving interpretation of non-intervention!
Are we a country or not!? Are we Canadians destined forever to be victims of business decisions made who knows where? Those decisions are certainly not made here by us in our country that has retirees to look after, youth who want to work and produce, and an economy that needs a new direction.
What is the next day-to-day decision of this foreign molloch that is going to stomp on us with impunity? Is it bankruptcy of U.S. Steel Canada to rid the U.S. owners of any responsibility for our pensions? Is that the next business decision the federal and Ontario governments will refuse to get involved with?
Not so long as we have anything to say about it.
This nonsense must end! Harper’s Canada is not a country of, for and by Canadians. This is not a country that defends the security and well-being of its citizens, their economy and future. It is a non-country subject to the whims of the most powerful global monopolies that do whatever they want because they can, because they are allowed to, because the governments refuse to intervene on behalf of Canadians.
U.S. Steel executives complain all the time of an oversupply of steelmaking capacity in the U.S. and globally. Why do they not simply pass a law and say steel consumed in the U.S. must be made in the U.S.? Canada should do the same and then we could all be happy in our strengthened steelmaking capacity harmonized to meet our internal demand. And if we did not have enough capacity then we could build it, which we are perfectly capable of doing. No, they prefer to complain and then march into Canada and destroy our steelmaking capacity so they can dump their U.S.-made steel on our backs because they have an oversupply problem. They treat U.S. steelworkers no better.
Stelco originally thrived precisely because the governments of the day rejected continentalism. They saw in their wisdom that if they allowed U.S. companies unfettered right to do as they please, Canada would not have been built and would have been reduced to producing mostly raw material. How about bringing new arrangements into being today that defend the country and its citizens and meet the challenges of the twenty-first century. Steel consumed in Canada should be produced in Canada. Heavy industrial machinery used in Canada should be manufactured in Canada. The present way is not working. The present way is riddled with recurring crises and unresolved problems precisely because governments refuse to intervene on behalf of the country and its citizens. Our governments turn a blind eye to the security and rights of the people and an active eye to defending the security and rights of big companies. This has to change and steelworkers and their allies are determined to change it.
Join us in this struggle for a new direction! We have a country to build!
This concludes our Sunday e-mail for this week. It is crucial for the flourishing of the Canadian economy and the self-reliance and sustainability of our own nation that we have a successful steelmaking industry.