At least 100 layoffs expected immediately at Algoma Steel

The axe is set to fall immediately at Algoma Steel, with at least 100 indefinite layoffs expected by week's end, SooToday.com has learned.

Union officials have not yet received from the company an exact number of people to be laid off, but Local 2251 of the United Steelworkers of America is advising its members that it expects at least 100 layoffs this week.

That figure is based on estimates previously provided by Algoma Steel of the number of people who could be laid off immediately.

Last night, the company announced that about 600 jobs will be lost over the next 90 days as part of a previously announced market adjustment plan.

Background article

Today, Steve Boniferro, ASI's vice president of human resources, announced that the Steelworkers and Algoma Steel will appear before an arbitrator on May 22 to verify whether the company may suspend or terminate its retiree transition program.

An answer is expected by May 26, Boniferro told employees.

The following is the full text of of a memorandum distributed today by Boniferro to all ASI employees:

**************************************************************** 03-05-15 02:09:42PM Memo To: All Employees

Memo From: Steve Boniferro, Vice President Human Resources

Date: May 15, 2003

RE: Implementation of Market Adjustment Plan

IMPLEMENTATION QUESTIONS AND ANSWERS

1. Why aren't the RTF's going home first?

The Company and the Union disagree as to whether or not the Collective Agreement allows the Company to cancel or suspend the Retiree Transition Program unilaterally.

The Company and the Union have agreed to go before an arbitrator on May 22, 2003 to verify whether or not the Company can suspend or terminate the RTP program.

We will be given an oral answer by May 26, 2003.

At that time, depending upon the outcome of the case, the Company will implement its plans to continue to displace the 600 employees.

2. Why the layoff?

The market is tough. Price is dropping, demand is down forcing our inventories to higher levels and the dollar is at a higher value than the previous few years.

All of these combined market forces make it necessary for ASI to make adjustments to ensure we are able to weather the storm.

3. How long will the layoff last?

Employees who are being laid off are being told that it is for an indefinite period of time.

The Company is unsure how long the layoff will last.

This is partially caused by the current steel market as well as the factthat if the Company is successful in displacing the RTF's, then some permanent employees may be recalled quickly.

Likewise, because many employees are eligible to retire at the end of the year this will cause displaced employees to be recalled.

Also employees may be recalled to meet operating requirements.

4. What happens to me if I am displaced?

If you belong to Local 2251 or Local 2724 you will be reassigned under the terms of your Collective Agreement.

If you are an exempt employee, you will be displaced according to the legislative requirements.

5. Are all departments impacted?

Yes - all positions in all departments have been assessed to determine if reductions could occur.

We did not ask for a across the board percent reduction as this is irresponsible.

There has been a lot of thought and discussion put into what we are doing.

Having said that, there will be some transitional pains.

This wouldn't be easy but it can and will be done.

6. How did you pick 600 employees as the number to be laid off?

Two consulting firms studied our efficiency rate.

Both firms have advised us that if we were able to increase our efficient use of employees then a significant number of employees would not be required.

We have also benchmarked ourselves against other steel producers and realize that we employ too many employees per ton of steel produced.

7. Can I have a Leave of Absence instead of being re-assigned or displaced?

Yes, provided that by granting the leave of absence we are not required to retain an RTP or prevent some other necessary re-deployment from occurring.

8. As an RTP, can I elect to be laid off instead of being re-assigned?

Yes, if you have been identified as holding a position that is no longer required, you can request that your employment contract be terminated.

Again provided that this does not prevent some other necessary re-deployment from occurring, this request can be accommodated.

9. How do I apply for EI if I am laid off?

The company is discussing a process with EI that will handle the layoffs in the most efficient manner possible. Further details will be communicated shortly.

10. What is my benefit coverage when I am laid off?

Benefit coverage will be continued.

11. What happens to the work that was performed by those people laid off?

All activities have been critically examined.

Some projects can be deferred, some cancelled and in other cases we need to find ways to do the work more efficiently. In the short term there will be growing pains.

Managers are being asked to take more risk but reasonable risk.

It was made clear that no risk can be taken with employee health and safety or the environment.

12. What about contracting out while there are layoffs

The Company will carefully examine every case of contracting out that is or will occur and in consultation with the Local Unions discuss alternatives.

13. The DSC's have not been consulted about this process. Aren't we supposed to perform a 4.02 analysis before we can implement a layoff?

The Company intends to continue to work through the joint process.

DSC's will be informed of changes as a result of reductions in operations and services.

In cases of job combinations, the 4.02 process is expected to be followed.

14. Why is this happening so fast?

As has been pointed out and history has shown, the steel industry has been far too slow in reacting to market changes.

We all know the impact that has had on us in the past.

This Market Adjustment Operating Model is the new way in which we must do business to ensure our long-term viability.

This bulletin has been prepared for informational purposes only.

For detailed responses to any of these or other questions, please contact your area manager.

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