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Essar Steel Algoma, workers reach deal

Jun 28, 2013 | 06:59 PM |

Tags  steel, Essar Steel Algoma, United Steelworkers, USW, USW Local 2251, Sault Ste. Marie, flat-rolled, flat-rolled steel steel

NEW YORK — Essar Steel Algoma Inc. has reached a tentative three-year agreement with United Steelworkers union members just weeks before the existing contract is set to expire.

The steelmaker tentatively agreed on a new labor contract with USW Local 2251, which represents the company’s hourly workers at its Sault Ste. Marie, Ontario-based flat-rolled mill, the company said June 28. The previous three-year agreement expires July 31.

Informational meetings on the deal and a ratification vote are scheduled for the coming week, an Essar Steel Algoma spokeswoman told AMM.

"This tentative agreement has been unanimously recommended by the USW Local 2251 bargaining committee," the company said. "This tentative agreement gives the business the stability it requires to survive this market cycle and provides our employees, customers and suppliers with the security they need."

While the spokeswoman for the company declined to discuss the terms of the deal, she did confirm it is "for a three-year term and it provides support for necessary amendments to the defined benefit pension plan."

Last month, the steel producer said that there was a likelihood it might face a labor disruption at its Ontario facility, where the local union accounts for some 79 percent of the employees at the mill. The Sault Ste. Marie-based company had earlier that it might be "unable" to successfully negotiate a collective bargaining agreement without a labor disruption, which would cause a "significant loss of production and sales" and have a "material adverse effect" on its financial conditions and operations (, June 20).

The tentative agreement comes at a time when supply-side changes in the sheet market have allowed a number of domestic mills to successfully implement new price hikes (, June 26). Market participants had previously pointed out that a potential labor stoppage at Essar’s Ontario facility, among other supply factors, would likely keep sheet prices stable for the near term.

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