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.
tentatively agreed on a new labor contract with USW Local 2251,
which represents the companys 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.
on the deal and a ratification vote are scheduled for the
coming week, an Essar Steel Algoma spokeswoman told
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
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 (
amm.com, 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 (
amm.com, June 26). Market participants had
previously pointed out that a potential labor stoppage at
Essars Ontario facility, among other supply factors,
would likely keep sheet prices stable for the near term.