October 27, 2021 - No. 100
Manufacturing Yes! Nation-Wrecking No!
Oppose Schemes to Pay the Rich!
• Essar Steel Algoma Completes Merger with Legato
- K.C. Adams
• Algoma Handout Political Arrogance in Contempt of Workers and Communities
- Pierre Chénier
• Criminal Corruption at the Highest Levels
• What the Workers Have to Say
Oppose Schemes to Pay the Rich!
Essar Steel Algoma Inc with steel facilities
in Sault Ste. Marie Ontario employs 2,700 workers who annually produce
2.8 million tonnes of hot and cold rolled steel sheet and plate
products. On October 19, Algoma Inc announced the completion of a
merger with the international investment cartel Legato. This combines
the U.S.-owned Essar Steel Algoma with the New York-based ownership of
Legato Merger Corp.
India-based Essar global cartel, which had bought Algoma Steel in 2007,
reportedly hived off the Algoma steelmaking facilities to U.S.
investors in 2017 although not much is known of the transaction as it
was classified as a closed private affair. The current merger of the
steel facilities with Legato reportedly gives the Essar Steel Algoma
U.S. owners over $1.1 billion worth of new shares in Legato and a net
gain of $306-million. The former secret private ownership shares of
Algoma will now become openly traded shares on the NASDAQ and Toronto
While steelmaking is essential for modern economies and is central
to manufacturing, air, rail and road transportation, home and
commercial construction, infrastructure and defence, the three major
steel producers in Canada are owned and controlled outside the country.
Stelco in Hamilton and Algoma are owned by U.S.-based global investors
and ArcelorMittal Dofasco in Hamilton is held mainly by Indian and
No modern economy can be considered self-reliant and in control of
its economic affairs without independent national control of its steel
industry. This absence is particularly galling for Canada, which has
all the raw material, energy, scientific expertise and skilled workers
necessary for a thriving steel sector capable of contributing to an
overall self-reliant stable economy under the control of Canadians and
serving their needs.
lack of Canadian control is particularly disturbing given that Canada's
steel sector appears very unstable suffering regular crises within
almost continuous boom and bust cycles. Algoma Steel itself has been in
bankruptcy protection under the Companies Creditors' Arrangement Act
(CCAA) in 1991, 2001 and again in 2015 along with
numerous private ownership changes. Bankruptcy disruption causes severe
strain on the workforce, including retirees, local contractors and
suppliers, and industry consumers that need a consistent stable supply
of steel means of production.
Canada's ruling elite and governments do not address this problem
from the point of view of building a stable self-reliant steel sector
under the control of Canadians to serve the needs of Canada's economy
first and foremost and engaging in international trade for mutual
benefit. Instead they allow the foreign ownership cartels to use
steel facilities for their private interests including jumping into
bankruptcy protection, closing facilities and selling off bits and
pieces or the whole when it suits them. On top of this, Canadian
governments give these foreign private owners millions of dollars in
public funds and favourable deals on infrastructure such as a low price
Canadians, particularly those employed in the steel sector find the
situation disturbing and in need of a new direction. The global
wheeling and dealing with Canada's steel mills and all this public
money pouring into the pockets of foreign oligarchs does not bring
stability to the steel sector nor solve the problem of Canadians having
over their steel industry as an important base of a stable secure
Legato Merger Corp. is a blank check company organized for
the purpose of effecting a merger, capital stock exchange, asset
acquisition or other similar business combination with one or more
businesses or entities. Legato's common stock, units and warrants trade
on the Nasdaq Capital Market under the symbols "LEGO," "LEGOU" and
On July 5, Prime Minister Justin Trudeau's
then Minister of Innovation, Science and Industry
François-Philippe Champagne, and others were in Sault Ste. Marie
to announce that $420 million in public money is being poured into
Algoma Steel by the federal government. This was one of a string of
photo-ops in many
cities across the country where public monies were doled out by Trudeau
and members of his Cabinet. These handouts to global private monopolies
in the aerospace and steel industries were announced just weeks before
Trudeau called the federal election.
October 19 announcement of the merger of Algoma Steel with the
international investment cartel Legato makes this $420 million given by
the Trudeau government to the U.S. ownership group that owns and
controls Essar Algoma Steel a really shady deal. It came right in the
midst of the secret maneuvering to merge or sell the steel mill
to Legato. The deal included over $200 million from the federal
government's Strategic Innovation Fund and an additional $220 million
from the Canada Infrastructure Bank. The total pay-the-rich scheme of
$420 million is more than the net gain of $306-million the U.S.
ownership group says it has pulled off with the Legato merger.
These acts of political arrogance by the party-in-power were not
merely designed to garner votes. They were also designed to impress
upon workers that their fate and the fate of their industries depend on
supporting the cartel party system, in particular the Liberal party,
and not on their own fight for their rights and for the building of
industries that serve the well-being of the people.
While in Sault Ste. Marie, Trudeau did not mention that the Algoma
workers have been through fraudulent bankruptcies three times under the
Companies' Creditors Arrangement Act
(CCAA). Nor did he mention that the Canadian state, which he
represents, is the author and the enforcer of this legislation and its
process that deprive the
workers of what belongs to them by right. The smoke and mirrors
announcement of public money being poured into Algoma Steel under the
high ideals of jobs and a cleaner future, showed disregard for the
workers' concerns, including concerns about the use of these monies by
the Algoma owners to get richer and embark on still another scheme
that could lead to yet another incursion into CCAA.
Workers' Forum commends the Algoma workers and United
Steelworkers Local 2251 for refusing to participate in this photo-op
and for standing firm in their demand to have a decisive say in the
fate of the plant and in the conditions of work and the protection of
the livelihoods of active and retired workers. Their future lies in
fight for the rights of all without which they are at the mercy of the
gods of plague.
Algoma Steel went into bankruptcy protection in 1991, in 2001 and again in 2015 under the Companies Creditors' Arrangement Act
to relieve its investors of financial and other obligations to
steelworkers, the public and certain private interests. The India-based
global cartel Essar Group seized control of Algoma Steel in
2007, operating it as a subsidiary known as Algoma Inc. In an
arrangement among oligarchs in May 2021, the New York-based
international investment cartel Legato Merger Corp was brought onto the
scene. The deal among the oligarchs merges Algoma with Legato and gives
Essar over $1.1 billion worth of new shares in Legato. In the midst of
all this, in July, the Trudeau government gave Algoma $420 million in
funds should be used for public purposes to humanize the social and
natural environment and to strengthen Canada's self-reliance and
stability. Human-centred productive enterprises are a most effective
way of generating public funds for public purposes. Public funds must
not on any account be handed over to private interests to defend
and enlarge their private enterprises and increase their control over
As always, Trudeau spouted high sounding words to excuse the
corruption of using his position in government to pay public funds to
the rich. To give the corrupt practice a shiny veneer, Trudeau declared
that the payment to the Essar global oligarchs would "create jobs and
build a cleaner future."
course the money in the hands of the rich may create jobs. Buying
workers' capacity to work and having them work in their private
enterprises is a way the rich become richer, through expropriating the
added-value workers produce. And that is the point for the ruling
elite. For them, public money must go towards strengthening the
domination and privilege of the rich and weakening the capacity of the
working people to defend their rights and have any control over their
work and lives. Global control by the oligarchs in no way brings
stability and security to the economy as Canadians have seen time and
Public money on the contrary should be invested in social programs
to meet the needs and guarantee the rights of the people, and to create
stable human-centred social enterprises that put workers to work
creating added-value for the common good and not to make the
billionaires richer. The added-value from human-centred social
can be invested back into the Canadian economy to defend it from
economic crises and to create possibilities for Canadians to enhance
their control over their economy and its direction.
Governments paying the rich underscore the need for a new direction
for the economy. The socialized economy must be under the control of
Canadians with the added-value workers produce invested back into the
Denounce the Corruption of the Trudeau Government!
Stop Paying the
Rich; Increase Investments in Social Programs!
When the Trudeau government handed over public
funds to Algoma Steel in July, to their credit, United Steelworkers
Local 2251 did not attend the photo op. Trudeau announced that the
money was to help Algoma transition to electric arc furnace (EAF)
steelmaking. Workers' Forum spoke to Mike Da Prat,
president of USW Local 2251 to get his opinion on the deal.
Mike Da Prat: The agreement with the government was
reached without any consultation with the workers. We have collective
agreement language that says we are supposed to be involved in a
consultative manner from the very beginning. The federal government
should have said we need to talk to the workers because they
have been subjected to Companies' Creditors Arrangement Act
(CCAA) bankruptcy protection three times. They owed us that. Why is the
government jumping in without any thought about requiring the company
to, at a minimum, protect jobs? There are some of us that are here now
that have been through all three of those CCAAs.
now Algoma Steel is making money and they have decided that with the
government funding, this is the route that they are taking. What the
government should have done was contact us, hear our concerns. What we
could have done with the loans as leverage was get some guarantees on
work assignments and how movement of workers
within the changed operation will take place. That did not happen.
Minister Champagne was there at the announcement. He has no worries
about job reductions but we do. We didn't attend the announcement
because according to us it was a mere photo-op between the government
and the company.
This process is not like an on and off switch, that we are an
integrated steel mill today, then that is switched off and the EAF is
switched on. That is not how it works. There is going to be a
transition period. They will need to run both processes simultaneously
for a period. New people are going to come in to get trained in the new
The older workers who are trained in the current process cannot be left
out in the cold to be gotten rid of when the EAF is running at full
speed. They will need a job. We are talking about a large number of
workers. That could be a mess and the company wants to embroil us in
this so that it can say that we were involved when they did not
consult us about the project.
Statements were made that we are going green, yet there is no
evidence for that conclusion. If we want to talk about going green,
what benchmark are we using? Are we using calculations of emissions
made based on when Algoma was new? Are they measuring the actual
emissions that they are producing now, when there are a number of
pieces of equipment that are not optimally maintained? We are having a
hard time keeping the environmental equipment maintained now. With the
decision that has been made that we are going EAF, the chances of their
pouring money into the existing equipment to prevent pollution are
zero. Are we going to be belching even more pollution in
the short term?
We were not given an option to even have a discussion about why we
are not upgrading our existing equipment. Now, when they say the
reduction of greenhouse gas emissions that will be achieved by this
project is equal to what is produced by 900,000 passenger vehicles, I
do not think that they have actually measured anything. If we are
talking about a theoretical gross emission reduction of x, is that
really the net result if you have increased diesel emissions because
scrap for the EAF is now going to be brought in by transport? You also
have to take into account that increase in emissions.
At Algoma, we have been through three CCAAs. We were presented by
management with decisions we were told were for long-term solutions to
our problems. Whatever management says is for our benefit, it is not.
They make big money, they accumulate debt, they do not pay down the
pensions and then they can't carry on. They can't pay
what they owe, they say. Then the reset takes place at the expense of
workers and taxpayers, and then we go through it all again. They are
telling us that this new project will be good for the long term. That
is the exact same thing that they have told us each time. Some of the
people that were here through all of that are still here. Not the CEOs
they moved on.
In my opinion, this was a photo-op for election purposes. The
company gets the money and the government gets the photo-op. That is
That is why we did not participate.
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