Canadian Goose Continues Laying Golden Eggs
Hamilton May Day 2012
One of the signs, among too many others, that the governments of Canada and Ontario do not give a fig about the Canadian economy is their attitude to the production of steel in Canada.
All four of Canada's integrated steel plants are in Ontario. ArcelorMittal Dofasco in Hamilton is said to be Canada's leading flat steel producer and a hallmark of advanced manufacturing in North America.
Hamilton is to date one of Canada's leading industrial centres. Its iron and steel industry, which began in the mid 19th century, has grown to become Canada's largest, accounting for a major part of the national steel output. Despite the fact that imports of steel to Canada continue to rise, many communities are reliant on the 120,000 direct and indirect jobs production in Hamilton and Lake Erie provide.
In 2019, Canada imported 6.8 million metric tons of steel. The volume of Canada's 2019 steel imports was almost one-fourth that of the United States, the world's largest steel importer.
Flat products accounted for 39 per cent of Canada's steel imports in 2019 -- a total of 2.6 million metric tons. Long products accounted for 33 per cent of imports (2.3 million metric tons), followed by pipe and tube products at 21 per cent (1.4 million metric tons), stainless products at 5 per cent (321 thousand metric tons), and semi-finished products at 3 per cent (189 thousand metric tons).
The United States was the largest source of Canada's steel imports in flat, long, pipe and tube, and stainless products. In flat products, the United States accounted for 63 per cent of Canada's imports (1.7 million metric tons) in 2019.
Since then, perhaps because Canada is now considered to be integrated into U.S. steel production, statistics about imports and exports are not readily forthcoming.[1] Also of significance is that other than what is imported and exported, to whom and from where -- illustrating Canada's integration into the U.S. war economy -- little if anything is said about the role played by the governments of Canada and Ontario when it comes to the disposal of Stelco, a jewel of Canada's steel industry. The fact is that Stelco Canada is not only the producer of large amounts of steel; it is also the producer of Golden Eggs. Recently, it was sold by owner Allan Kestenbaum and his cronies to Cleveland-Cliffs, headquartered in Cleveland, Ohio, for $3.8 billion. This was seven years after Kestenbaum and his private equity partners, known as Bedrock Industries, acquired Stelco out of bankruptcy protection in 2017. Previously in 2015, Stelco had been severed from the other operations of then owner U.S. Steel after seeking protection under the Companies' Creditors Arrangement Act (CCAA) for the second time, the first time also organized so that private financiers and their legal and restructuring retinue could make a big score for themselves at the expense of steelworkers, their community and Canada itself.
The facts associated with the sales and resales of Stelco since 2004 and now with the sale to Cleveland-Cliffs under the most dubious circumstances need to be investigated. What was the role of the governments of Canada and Ontario in paving the way for a handful of U.S. financiers and their retinue to organize such a big score? What role did the government-sanctioned fraud called CCAA play in Canada's integration into the U.S. war economy?
According to TML's calculations Kestenbaum et al. paid $500 million for Stelco, bringing it out of CCAA in 2017. He then spent $114 million for land around Hamilton Works and Lake Erie Works in 2018, and put $30 million into the Hamilton mill in 2019. This amounts to around $644 million in gross payments. In 2022 he sold all of Stelco's lands around the two plants to Slate Asset Management in a $518 million deal. Deduct the $518 million from the gross payment of $644 million leaves a payment for Stelco of $126 million.
Kestenbaum and his ownership group are to receive $3.8 billion from Cliffs in cash and stock from the sale of Stelco. This leaves a credit of around $3.674 billion to be divided up among the Kestenbaum ownership group after just seven years. (Plus whatever they expropriated annually during the seven years of ownership in "compensation." These payments came from the new value steelworkers produced during this period.)
No wonder the Globe and Mail titled its article "The Sale of Stelco Continues Billion Dollar Windfall for Its Owners."
The aim of the
discussion which United Steelworkers Local 1005
led throughout this process since 2004 was always to give
priority to
the claims of steelworkers and their community on the wealth
they
produce and to keep steel production under Canadian control,
including
the social product and
wealth steelworkers produce.
Kestenbaum and his cronies and those who preceded them never intended to develop Stelco into the steel company Canadians need and wish for. Like his predecessors, Kestenbaum has proven in practice that his principle aim is to line his and his cronies' pockets leaving Canadians further trapped within the U.S. military-industrial-civilian complex and war economy with enormous produced social wealth flowing south into the hands of unscrupulous individuals and narrow private interests.
The very least a self-respecting Government of Canada could do is intervene to stop the sale and take control of the Stelco facilities and demand the ill-gotten gains of the Kestenbaum gang be returned to the Hamilton region and be put to use to strengthen steel production and distribution in Canada, assert the rights and just claims of steelworkers and help deal with the glaring social inequalities and other problems in Ontario and Canada.
Also to discuss is why this sale to Cleveland-Cliffs is presented in the mass media and by steel experts and university pundits as the only possibility with no other direction considered. Statements made to the effect that the U.S. buyer promises to be a good employer do not answer the questions which arise surrounding what amounts to robbery in broad daylight of Stelco's golden eggs.
Of interest to Canadians is how Stelco, Dofasco and other steelmakers can become a steel complex to serve Canadians under the control of Canadians especially those who do the work, and to harmonize the company's relations with the people and environment and make a contribution to turning Canada into a zone for peace.
Stelco steelworkers raised important slogans when they refused to cut their throats by capitulating to two rounds of CCAA fraud. Steel, Not Steal! Uphold the Dignity of Labour! Our Security and Our Future Lie in Fighting for the Rights of All! These calls continue to be upheld by Hamilton steelworkers because they remain even more valid today.
This article was published in
Volume 54
Number 46 - September 1, 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/MS54464.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca