The Stelco Saga: Restructuring and Resistance in the Neo-Liberal Era

Abstract

<p>Global market conditions have led to large corporate bankruptcies in recent years, particularly in the steel sector. Bankruptcy restructuring under the u.s. Chapter 11 or Canadian Companies' Creditors Arrangement Act [CCAA] places employee pensions at risk. In response to concessionary restructuring, the U.s. arm of the United Steelworkers [USW] intervened in several steel sector bankruptcies, developing restructuring solutions that led to partial or near-complete restoration of pensions and collective agreements. In Canada, during Stelco's troubled bankruptcy process between 2004 and 2006, Steelworker locals employed this interventionist method to prevent pension and collective agreement concessions. Scholars, such as Frost and Bacon, implicitly provide a rationale for union intervention into bankruptcy restructuring. They argue that union intervention in general corporate restructuring allows workers a greater voice in the process, leads to optimal results, and prevents union irrelevance. Frost outlines several criteria for maximizing union success during restructuring: the strength of union intra-organizational and external ties; the responsiveness of the union leadership towards the interests of the membership; and the ability of the union to access information and participate at all levels of the process. Many of Frost's recommendations were critical to the success of the USW locals at Stelco in achieving their bargaining and restructuring goals. Unlike in the more cooperative restructuring examples studied by Frost and Bacon, however, Stelco's Canadian locals employed a very assertive stance, since management exhibited initial hostility to union intervention. The union also found it necessary to enlist the help of government. While union intervention in bankruptcies remains a controversial process, it is one possible solution for troubled manufacturing unions, represents an overall USW push towards greater involvement in management, and may even lead towards an exit for labour from the discarded "post-war compromise."</p>