April 6, 2017

Stelco and Essar Steel Algoma

Bankruptcy Fraud of the
Financial Oligarchy


Stelco and Essar Steel Algoma
Bankruptcy Fraud of the Financial Oligarchy
Essar Steel Algoma Intrigue - K.C. Adams
CCAA Monitor's Report at Essar Steel Algoma

Strike at CEZinc

Join April 28 Protest in Toronto -- Demonstrate with CEZinc Refinery Workers!
Militant Demonstration in the Streets of
- Pierre Chénier

Mandate Review of Canada Post
New Attacks Being Prepared Against Postal Workers - Louis Lang

Stelco and Essar Steel Algoma

Bankruptcy Fraud of the Financial Oligarchy

Both U.S. Steel/Stelco and Essar Steel Algoma are currently under bankruptcy protection of the Companies' Creditors Arrangement Act (CCAA). Yet, both steel producers are in a business upswing and making money. Stelco has announced its cash liquidity will reach $300 million by this June, and Algoma Steel appears to be booming according to the latest CCAA monitor's report.

Why then are they under bankruptcy protection and demanding enormous concessions from steelworkers, retirees, unsecured creditors, municipalities and others? And why indeed is Stelco continuing to deny retirees the post-retirement benefits for which they are legally entitled? The simple answer is because they can when using the police powers of the CCAA.

The experiences under CCAA point to a situation where large company bankruptcy protection is not used to solve particular problems of production and distribution or general problems in a sector. A certain faction of the financial oligarchy uses the CCAA to take advantage of a downturn or other difficulties, that may not even be related to the particular company, to attack their competitors, workers, retirees and others. The faction uses CCAA as a means to a self-serving end that has nothing to do with solving problems in the economy and industry.

At Stelco, U.S. Steel clearly wanted to eliminate, or at least cripple, a competing steelmaker. It drove Stelco into a corner through wrecking of its production capacity, in particular in Hamilton. After doing so, U.S. Steel went into CCAA to salvage something for itself from the damage it had deliberately caused and to put a firewall between its assets in the U.S. and Canadian workers, retirees and others with legitimate claims on Stelco.

If the Bedrock proposal for Stelco/U.S. Steel to exit CCAA succeeds, then U.S. Steel walks away with a payoff of $126 million, plus newly acquired former Stelco steel Canadian customers supplied from its mills in the U.S., and a much crippled Stelco competitor. Besides, who knows the insider connections within the financial oligarchy and what they are cooking up amongst themselves. The U.S. oligarchs at Bedrock poised to seize control of Stelco after stripping pensions, retiree benefits and environmental remediation off the Stelco balance sheet could very well be financial associates of those who currently control U.S. Steel. At the very least they represent the same social class interests. Certain U.S. billionaire oligarchs with investments in this and that fund could have social wealth and positions of control in both Bedrock and U.S. Steel.

For example, as Jim Skinner points out in an interview with Workers' Forum, "Cliffs [Cliffs Natural Resources from Cleveland] also owned Bloom Lake mine in Quebec. They bought that for $4.3 billion and sold it (to Champion) for $10.3 million! We have a problem with that as one of the people on the Board of Directors of Champion is also the Vice-President of Cliffs. It is a fire sale and we think there is some collusion there. But Cliffs cannot be sued while under CCAA."[1]

Through CCAA and its police powers, Bedrock is conspiring with Canadian state authorities to take the pension and retiree benefits of Stelco workers off the balance sheet and deny any responsibility for environmental remediation upon exiting CCAA. This sets up Stelco/U.S. Steel Canada as a later target of a big score for the Bedrock U.S. oligarchs, just as it was in 2007. At that time, Stelco was stripped of $1.2 billion by oligarchs who had seized control of Stelco under CCAA in 2004-06.

Those manipulating the CCAA today may very well be associates of those in control at U.S. Steel and acting in collusion. This must not pass! Canadians demand Stelco must keep producing and meeting its social obligations to workers, retirees, the community and economy.

No to the CCAA Scams of the Oligarchs! No Means No!


1. Jim Skinner is a member of the Wabush Pension Committee waging a determined battle to uphold the rights of miners and retirees in opposition to the anti-worker dictate of the CCAA courts. Jim is a former President of United Steelworkers Local 6285 representing workers at Wabush Mines located in Labrador whose owner Cliffs is being protected under the police powers of the CCAA.

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Essar Steel Algoma Intrigue

The situation at Essar Steel Algoma is a tale of CCAA intrigue similar to that of U.S. Steel/Stelco. But in the case of Algoma Steel, powerful global oligarchs are openly fighting for control. Investigating a CCAA bankruptcy is like suddenly turning on the lights in a cheap hotel and watching all the cockroaches scurry for cover. The knives are out amongst the oligarchs and not one has the interests of the Canadian economy and working people in mind. Far from it. The oligarchs duking it out for the Algoma Steel spoils are a real rogues' gallery of global bandits.

The spectacle has the now infamous Cliffs Natural Resources from Cleveland extending into Canada its fight and competition with Essar Global Funds over control of iron ore deposits and mining in Minnesota. Cliffs accuses Essar Global of being unstable and incapable of managing Algoma because of its financial troubles in Minnesota where Cliffs and Essar are in a no-holds-barred battle for control of iron ore resources and mining rights. Cliffs even introduced a motion into its iron ore supply contract with Algoma prohibiting the company from considering any Essar Global CCAA restructuring proposal. In a situation resembling a macabre comedy, Cliffs itself, while denouncing Essar Global for instability, is engaged in a nasty CCAA bankruptcy of its own making in Labrador and Quebec, as it tries to destroy iron ore producing competitors in Canada as well as Essar Global in Minnesota.

The list of oligarchs fighting it out over the spoils of Algoma Steel contains some of the most powerful in the world: Deutsche Bank and Essar Global Fund of course but also Golden Tree and Bain Capital from the U.S., the two largest secured creditors conspiring to defend their narrow private interests and empires.

Within the destructive fight amongst the oligarchs, the CCAA process also takes aim at Algoma steelworkers and salaried employees demanding more than 40 concessions in new collective agreements including an across the board 10 per cent wage cut. The aim of a particular CCAA process has nothing to do with solving problems within the economy, sector and facility but is essentially the exercise of police powers to serve the narrow private interests of the oligarchs in control who stand opposed to the interests of working people and the Canadian economy and society.

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CCAA Monitor's Report at Essar Steel Algoma

The bankruptcy monitor Ernst & Young reports Essar Steel Algoma shipped more steel per day at a higher selling price in February compared to January. The monitor says, "Algoma has experienced an improvement in average selling prices coupled with strong production volumes." This amounted to 194,000 net tons shipped, or 6,928 net tons per day. Average selling price climbed to $739 (per ton) from below $700 in January with the selling price expected to improve in the coming months. Algoma Steel under CCAA bankruptcy protection declared earnings of $28 million for the short month on gross income of $157 million. (All prices in U.S. dollars.) The court document says, "Steel prices have increased by 72 per cent between December 2015 and March 2017 and the forecast is favorable for continued increases over the next few months."

The solid income and prospects have not stopped those in control of the CCAA process from demanding concessions from steelworkers and salaried employees. To meet their anti-worker aim and put pressure on workers, the CCAA judge in charge ordered the negotiating committees for United Steelworkers Local 2251 and 2724 sequestered incommunicado in Toronto from March 22 until March 30.

Various oligarchs circling Algoma demand their pound of flesh from the earnings while denying the actual producers and retirees their legitimate claims. The Debtor-In-Possession (DIP) lenders led by Deutsche Bank are claiming ever increasing amounts from the value Algoma workers produce. The DIP lenders received another prepayment of $10 million on March 31, plus an additional $2.1 million in monthly fees under the third amendment to the DIP agreement and a $1.25 million penalty the judge awarded them because Algoma Steel has so far failed to extract $22.2 million in concessions from workers who have held firm that No Means No!

Note from the Monitor's Report

The monitor says Algoma Steel has been complying with prepayment requirements under the DIP term facility, mainly to Deutsche Bank. During the last six weeks alone, Algoma has prepaid about US $42.7 million (C$57.1 million) in interest and principal.

The payments are being made through court-ordered "cash sweeps" payable to the DIP lenders every week. If the steel mill's unrestricted cash exceeds US$25 million at the end of any Friday, it must "sweep" the excess (calculated to the nearest US$100,000) to the DIP lenders.

Meanwhile under a CCAA court order, no payments are allowed to go to the steelworkers and salaried employees' underfunded pension plans or for the tens of millions of dollars owed to the City of Sault Ste. Marie for property taxes, and other money owed to local suppliers and contractors.

In addition to the cash sweep for the period March 25 to May 5, Algoma is expected to pay US$7 million for interest and fees (not principal) for the DIP facilities, and $6 million for CCAA lawyers and court fees.

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Strike at CEZinc

Join April 28 Protest in Toronto --
Demonstrate with CEZinc Refinery Workers!

CEZinc workers demonstrate, March 29, 2017 in Salaberry-de-Valleyfield, Quebec.

Friday, April 28 -- 10:00 am
Toronto Stock Exchange, TMX Broadcast Centre
130 King Street West, Toronto

Workers on strike at the CEZinc refinery in Salaberry-de-Valleyfield, Quebec, will be in Toronto on Friday, April 28, for a demonstration at the Noranda Income Fund's (NIF) Annual General Meeting. NIF owns CEZinc. Other steelworkers and their allies from Quebec and Ontario will also be there to support the CEZinc workers. All friends and allies of the workers' movement are invited to attend and show the financial oligarchy that workers stand as one in defence of their rights.

Workers' Forum calls on workers to join the demonstration in Toronto and stand firmly with the Salaberry-de-Valleyfield workers in their fight for their rights against the global mining oligopoly Glencore and the Noranda Income Fund. Glencore controls NIF through ownership of 25 per cent of its stock and operates the refinery.

Call of Alain Croteau, Quebec Director of the Syndicat des Métallos (United Steelworkers) to Demonstrate in Toronto

Alain Croteau speaking at a demonstration in support of the striking CEZinc workers on March 29 called on workers to demonstrate in Toronto on April 28:

"We know that it is Glencore that is pulling the strings in the back with the Noranda Income Fund. There is going to be a general meeting of shareholders of the Noranda Income Fund on April 28 in Toronto. The Quebec and Ontario steelworkers will be there where the meeting is taking place and at the meeting itself to defend their rights in front of the shareholders so that they know exactly what is happening," Alain said.

"Following this action, we are going to launch a corporate campaign across the United States and other countries if necessary. It is difficult to sustain a strike, but there is a good strike fund and we are receiving financial assistance from several locals in Quebec and several locals from the rest of Canada have also committed to provide financial assistance," he added.

Glencore and Noranda Income Fund

The Noranda Income Fund owns CEZinc. The global Glencore empire owns 25 per cent of the NIF stock listed on the Toronto Stock Exchange and operates the refinery. Glencore is also the exclusive supplier of zinc concentrate to CEZinc and the sole purchaser of the zinc metal and by-products that come out of the plant.

The 371 CEZinc workers have been on strike since February 12 against demands for concessions from NIF, in particularly to reduce wages and weaken their pension plan. NIF wants to introduce a system of gradually reducing wages and transferring that amount into the pension fund. The company would then reduce the value it puts into the pension fund by the same amount. This directly lowers the wages of workers with the amount going into the coffers of NIF, as added-value. The company also wants to increase the age for early retirement for all workers. This particularly affects workers who might benefit from early retirement due to wear and tear on their bodies or for other personal reasons.

Workers reject the concessions as an attack on their rights. They see changes as an effort to lower their working conditions and wages to an uncertain end. The concessions could then become a template and applied to other workers in the Glencore empire.

Already Glencore has threatened workers at the Horne copper smelter in Rouyn-Noranda that their pension plan could be the subject of a similar attack when their collective agreement is up for renewal in 2018. CEZinc workers blame the global oligopoly Glencore and NIF for these concessionary demands and insist they must be withdrawn. Their slogan is We Will Not Back Down! This is the message they are taking to shareholders and Torontonians on April 28.

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Militant Demonstration in the Streets of

More than 400 CEZinc workers and their allies demonstrated in the streets of Salaberry-de-Valleyfield in the early evening of March 29. They marched in solidarity for their just strike against Noranda Income Fund and the global mining oligopoly Glencore.

CEZinc workers, who began their strike on February 12, held high their union flags and banner emblazoned with We Will Not Back Down! An impressive number of other steelworkers joined the demonstration including workers from Samuel and Son, themselves on strike since February 4, and others from Ciment Lafarge.

The demonstration welcomed the participation of more than 20 workers from the Horne copper smelter who made the 12-hour bus trip from Rouyn-Noranda. The mining giant Glencore also controls the Horne smelter.

With their banners, flags and signs, the demonstrators marched through the streets of this industrial city located on the Île de Salaberry in the Saint Lawrence River southwest of Montreal. They were greeted along the route by residents and shopkeepers who came out of their houses and stores to show their support. People know the difficult and often dangerous work of CEZinc workers with all the toxic products in use at the refinery and the constant battle to defend the rights and health and safety of workers and the nearby population.

The demonstrators were deeply moved that the action ended in front of the sculpture Le Souffle d'Éole, a symbol of the heroic 1946 strike of more than 3,000 textile workers at Montreal Cotton in Valleyfield. The workers fought a courageous battle for the improvement of their working conditions and the recognition of their rights, which included legal recognition of their union in a city that was practically owned by the company. The workers did not back down in the face of the police powers and violence of the Quebec Duplessis government.

Demonstration March 29, 2017, concludes in front of the sculpture Le Souffle d'Éole.

Comments of Worker Representatives Manon Castonguay
and Mario Montmigny

Manon Castonguay, President of USW Local 6486 representing CEZinc workers said, "We are very pleased with the visit of our brothers and sisters of the Horne smelter. We are fighting to preserve the conditions that generations before us have struggled to obtain, here as in Rouyn-Noranda or at Glencore in Montreal East. Our struggle resonates with others because it is universal. Everywhere, the big corporations try to pocket more profits by siphoning from the workers. We refuse, we resist! We can do it thanks to our solidarity!"

Mario Montmigny, President of the Syndicat des travailleurs de la mine Noranda said, "The struggle of the workers of CEZinc is also ours. We have the same pension plan that they have, and there is a good chance that we are going to face the same greedy demands in our next negotiations as those that are being made here. In the face of multinationals such as Glencore, we draw strength from our solidarity. It was important for us to support other union members who resist these demands for rollbacks."

Unity in Action

Since 2016, workers throughout Quebec have been building an inter-union cooperation regardless of specific affiliation. They have been holding joint actions to support one another when on strike, such as the demonstration on March 29, and in defence of their common pension fund and in opposition to subcontracting.

At present the joint actions include the Horne workers, who are unionized with the CSN (Fédération de l'industrie manufacturière), the Glencore steelworkers who are members of the Syndicat des Métallos, as are the CEZinc workers, plus workers at CCR, a copper and precious metals refinery in Montreal-East, and workers of the Fonderie générale du Canada in Lachine.

The Glencore steelworkers, including representatives of the CEZinc strikers visited the Rouyn workers earlier and the Rouyn workers reciprocated on March 29, taking part in the demonstration with their banner On the Road to Negotiations. The enthusiasm of all the workers from different unions for this precious unity in action for a common cause has been palpable wherever the workers have gathered.

(Photos: Metallos)

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Mandate Review of Canada Post

New Attacks Being Prepared Against Postal Workers

The last round of negotiations between Canada Post and the Canadian Union of Postal Workers ended in a stalemate. For ten months of what was called negotiations, Canada Post refused to negotiate and instead used threats of lockout and other brutal threats to force the Union to accept roll-backs, but the intimidation did not work.

Finally with the involvement of federal mediators, a tentative agreement was signed in September 2016 and was later approved by the workers in spite of the fact that the new contract is for a two-year term and expires on January 31, 2018. This continues the situation of insecurity for the workers who have been facing further attacks on their pensions, benefits and working conditions as this short-term contract expires.

Faced with the determination of the workers not to accept roll-backs, the Trudeau Liberals, who had campaigned in the election with promises of restoring home delivery and reversing the cut-backs imposed by Canada Post, were not in a position to impose roll-backs on the workers by force.

The short-term agreement did not resolve any of the most important issues faced by the workers, like the ultimatum of the corporation to eliminate the Defined Benefit Pension Plan, the further privatization of postal services by eliminating the remaining CUPW-staffed retail offices with losses of thousands of positions and staffing problems with the increased use of precarious part-time and temporary employment eliminating full-time jobs.

While the Trudeau government pretends to support "a balance in collective bargaining," and "good faith negotiations," to resolve the issues, the experience of postal workers tells a different story. During the last round of negotiations when postal workers were facing threats of lock-out and unilateral changes in working conditions by Canada Post if they did not accept devastating roll-backs, the government's commitment to "free collective bargaining" was nowhere to be seen.[1]

Instead of instructing the Crown Corporation to negotiate seriously, the Trudeau Liberals launched a Mandate Review of Canada Post to directly interfere in negotiations in an attempt to pressure the Union and workers to accept the roll-backs voluntarily.

On September 12, 2016, a four-member panel appointed by the government released a report entitled, "Canada Post in the Digital Age." Under the guise of informing Canadians and Parliamentarians about Canada Post's financial situation and the "needs of Canadians and viable options," the discussion paper was used to spread disinformation about a "crisis" in the pension plan and to present Canadians with a fait accompli that the "dire financial situation" of the corporation makes service cuts unavoidable. The government made sure that the public consultation on the future of Canada Post was limited to what to cut and how much.

The so-called discussion paper was then sent to the House of Commons Standing Committee on Government Operations and Estimates which also released a report on December 13, 2016, "The Way Forward for Canada Post," which "includes recommendations to the government of Canada on the future of Canada Post."

Past experience with the Trudeau Liberals has shown that the government will do whatever it wants with the report and is scheduled to announce its decisions regarding the "future direction of Canada Post," in the next few days or weeks, this spring.

This entire procedure speaks volumes about the hypocrisy of a government which swears to respect "a balance on collective bargaining" but in practice does everything to undermine any discussion on the demands of the workers or the need for a public postal service.

Canada Post management is also preparing for a new round of attacks against postal workers. With full knowledge of the soon-to-be-announced government plans, the corporation has launched a series of unilateral changes in working conditions in violation of the collective agreement.

On March 10, 2017, on the same day that the corporation held meetings on the shop floor, the Union was notified that the corporation intended to implement a major restructure of delivery operations in the urban unit. The change would introduce "night routers" at letter carrier depots to perform the function normally done by letter carriers, to separate and prepare mail for delivery.

Without any consultation with the union about how this change would affect the work performed by letter carriers, including the length of routes and the reorganization of the work required, the corporation announced to the workers that the changes would be implemented on September 18, 2017.

This method of using night sorters was attempted more than 25 years ago but was immediately opposed by the workers because it was highly inefficient and was intended to increase the burden of work on letter carriers by lengthening routes and time spent on their routes. The corporation's plan at that time failed and has not been used since.

Introducing such drastic changes without any consultation is a clear indication of the methods the corporation intends to follow in preparing for the upcoming round of negotiations.

Also in coordination with government attacks on postal workers, the corporation has recently informed the Union that it intends to implement a "shared risk" model for pensions to replace the Defined Benefit Pension Plan which exists presently. This follows the introduction of Bill C-27 by Finance Minister Morneau, An Act to Amend the Pension Benefits Standards Act, 1985. This legislation, if passed, gives Crown Corporations the power to establish Target Benefit Plans to replace the Defined Benefit Plan and would eliminate the right of workers to a secure pension and absolve the corporation of any responsibility to provide workers with a proper standard of living in retirement.

It is clear that the temporary stalemate in last year's negotiations and the short two-year agreement was a prelude to renewed attacks on postal workers who are fighting for their rights.

With the Mandate Review and Bill C-27, the Trudeau government intends to take important issues like pensions and working conditions and benefits and the future of Canada Post out of the realm of any discussion or negotiation and impose its dictate not just on workers but all Canadians as well.

In the coming period the strength and unity of postal workers and their ability to fight to defend their rights deserves the support of all Canadians who want the future of a public Post Office to be in the hands of the workers and the people and not under the dictate of the ruling elite.


1. "Defend the Right of Postal Workers to a Say in Their Working Conditions," TML Weekly, August 27, 2016.

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