CHICAGO Unionized workers at Globe Specialty Metals Inc.s facility in Becancour, Quebec, are bracing for a strike or lockout after receiving the companys final contract offer April 17, which a union official called unacceptable.
The New York-based silicon metal producer is seeking deep cuts at its Becancour operation as it looks to make the facility cost-competitive with other company plants, Communications, Energy and Paperworkers Union of Canada (CEP) official René Gauthier told AMM.
While the companys proposed cuts are "too profound," the New York-based silicon producer does not appear inclined to negotiate, said Gauthier, who disputed Globes calculations about production costs at Becancour. Gauthier said such factors as tax rates and different currencies had not been properly taken into consideration.
Globes five-year contract with CEP Local 18, which represents about 150 workers at the Becancour facility, expires April 30 (amm.com, March 12). "The first of May, they are going to put us outside," Gauthier said.
The union does not want to strike, but "99 percent" of union members are prepared to vote for one if necessary, Gauthier said, noting that Globes proposed cuts would hit not only union workers but also salaried workers, and would bite into insurance and pension plans.
"The company has given the union an offer, which is in line with its business objective, and hopes it can reach an agreement with the union," a source at Globe said.
Gauthier contended that production from the plant was sold out. But one market source said the impact of any labor disruption at Becancour on the wider silicon metal market might be muted, especially given the current sluggish market. As much as two-thirds of the silicon metal production at the facility could be shifted to Globes furnaces in Beverly, Ohio, he said.
Globe cut some 12,000 tonnes of silicon output in July 2011 after converting one of two silicon furnaces at Beverly to ferrosilicon (amm.com, July 7, 2011). The second furnace in Beverly is currently down for maintenance, the source said.
"They could put both of those (Beverly furnaces) on silicon metal, and it really wouldnt be taking that much metal off the market," he added, noting that the silicon furnace could be brought back up relatively quickly and that switching the ferrosilicon furnace to silicon metal production would not be too difficult.
Globe has scheduled three maintenance outages in its fiscal third quarter and three in its fiscal fourth quarter (amm.com, Feb. 8).
Market sources said that while making strict comparisons between costs in Quebec and costs in Ohio might not be reasonable, the Canadian dollar is currently stronger than it has been historically against the U.S. dollar. Staffing in Quebec is roughly twice what it might be in the United States, while wages and benefits there also are more generous.
Globe holds a majority stake in the facility, which has an annual capacity of 47,000 tonnes of silicon, with Dow Corning Corp. holding a 49-percent share (amm.com, Aug. 21).
Dow Corning, Midland, Mich., declined to comment.