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Stelco Customer Reacts to 90-Day Notice

10/11/2004 - One of Stelco Inc.’s largest customers has served notice that it will remove its business from the company for 2005 unless it receives assurances of Stelco's ability to provide security of supply through the coming year.

One of Stelco Inc.’s largest customers has served notice that it will remove its business from the company for 2005 unless it receives assurances of Stelco's ability to provide security of supply through the coming year.

Union to Meet
with Customers

The United Steelworkers and its local union 8782 (Stelco Lake Erie works) say the union is “fed up with the fear-mongering tactics of Stelco President Courtney Pratt and his team,” including the company’s most recent press release.

The United Steelworkers believes this tactic of “intimidation and hysteria” will only serve to create the confrontation that Pratt pretends to want to avoid.

Local 8782 and the United Steelworkers are preparing to meet with GM and any other customers of Stelco to explain how “the irresponsible actions of management are the only reason for any concern.”

Union lawyers and financial advisers have been instructed to arrange those meetings.

In a letter, the customer cited the uncertainty of supply caused by USWA Local 8782's issuance of 90 days notice of a potential strike at the company's Lake Erie facility. The letter stated that, even though the customer has reached agreement with Stelco on the pricing terms for a 2005 contract, it is concerned about the possibility of a strike during that period.

As a result, the customer indicated that it cannot enter into a 2005 contract with the company unless it receives assurances soon that Stelco will be able to perform throughout the term of the proposed agreement.

Courtney Pratt, Stelco's President and CEO, said, "This is an extremely serious development, one that has significant consequences for Stelco's employees, retirees, other stakeholders and the communities in which we operate.

"We've indicated for months that our customers needed and wanted assurance as to security of supply. The 90 days written notice provision was an essential part of the June 23rd Agreement in which the company and the USWA Locals, including Local 8782, established a framework for discussions on collective bargaining, restructuring and other issues. Local 8782 rendered this key customer protection provision irrelevant last Friday when it provided 90 days notice of a potential strike.

"We continue to do everything we can to preserve the interests and address the concerns of our customers. We are reviewing our options, working with customers, and pursuing solutions with Local 8782.

"Last week I expressed the hope that the Local would keep in mind the legitimate interests of all stakeholders in light of its actions. We are now face-to-face with the consequences of the issuance of the 90 days strike notice. I again urge the Local to work with us to retain the business of our key customers. If we cannot provide this important customer with the assurance it seeks in the coming days, it may seriously jeopardize our business."

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills, and manufactured products businesses.