Essar Steel Algoma-Steelworkers negotiations update

NEWS RELEASE

ESSAR STEEL ALGOMA INC.

************************* We are just past the halfway point in bargaining with both USW locals at Essar Steel Algoma.

The company is looking to negotiate agreements that ensure the viability, sustainability and continued success of this operation for many generations to come.

It comes as no surprise to anyone who reads the Sault media or follows steel that the financial and operational pressures in the steel industry persist.

Not the least among these are the increasingly volatile raw material costs.

These pressures weigh heavy as we go through the process of contract negotiations.

Finding the balance between a fair and reasonable settlement that reflects the importance of our employees and the realities of the steel industry is challenging.

In spite of this we are working towards achieving fair settlements.

We believe that for both USW locals our proposals reflect these realities.

For USW Local 2251, the Local representing our hourly employees, this means we are seeking ways to optimize productivity and to ensure our competitive performance in an increasingly consolidated, global steel industry.

Discussions to date have been constructive in this regard and talks are now moving to monetary issues.

For USW Local 2724, which represents the front line supervisors, technical and professional staff, this also includes making changes that will put us on par with our peers in the industry.

Among the items in our proposals to USW 2724 is the need to amend the work terms for our front line supervisors, who are our front line management personnel, in a way that makes us competitive within our industry.

Although we understand how this situation evolved it must be corrected.

We invest a great deal in our front line management personnel and we need to be able to guide their respective career path.

Current contractual restrictions within the bargaining unit limit their mobility, creating operating inefficiencies and limiting opportunities for professional development.

There is a tremendous talent pool at Essar Steel Algoma Inc. and within the Essar Group which all global operations benefit from being able to access.

With this in mind, our Local 2724 proposals also contain some provision for shared services and for sharing tasks among the Essar group of companies where it is most economical and makes the most business sense.

The revisions we are seeking include safeguards for current employees ensuring no employee job is affected by shared services.

In terms of our competitive advantage, no other competitor is prevented from using the economy of shared services to reduce its costs with appropriate protections for existing employees.

What we seek is a level playing field.

These important issues are critical to the ongoing viability of the company, and they are not going away.

The sooner we enter into meaningful discussions with Local 2724 on these issues, the sooner we can arrive at solutions that all parties can support.

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