Newspaper article The Christian Science Monitor

Steel Dispute Tests Labor Strike Could Reveal Strength of Unionism. CANADA

Newspaper article The Christian Science Monitor

Steel Dispute Tests Labor Strike Could Reveal Strength of Unionism. CANADA

Article excerpt

THE Canadian labor movement faces an economic challenge of unknown proportions.

It may be a fierce, but short-lived, recession from which unions can bounce back. Or it may turn out to be a tidal wave that transforms the country's labor relations.

The first clues about this brewing economic storm will likely show up here in Hamilton, on the shores of Lake Ontario.

This city is the headquarters of Dofasco Inc., Canada's largest steel company, and home to Stelco Steel, the steelmaking division of Toronto-based Stelco Inc. For the past month, union steelworkers at the facilities of both companies have been on strike. Since Dofasco is largely nonunion, labor experts believe the contract talks at Stelco will send a signal to other steel and nonsteel industries. So far, both sides appear far apart in their efforts to replace their contract that expired July 31.

The strike is being closely watched because it is the first major walkout since the Canadian-United States free trade agreement Canada came into effect at the start of 1989. And there are fears that the trade pact will put Canadian unions on much more slippery footing than in the past.

"It's a critical strike," says Robert Storey, a labor studies professor at McMaster University here. "It will either help to solidify or undermine the labor movement as a whole."

The immediate problem is economic, company and union officials agree. Government policies are pushing up interest rates and the value of Canada's dollar. That is helping to fight inflation but it is also making it difficult for manufacturing companies, such as Stelco, to turn a profit. For the first six months of 1990, Stelco reported a loss of just under $7 million (Canadian), its first loss since 1984.

"We are already in a recession in the manufacturing sector," Frederick Telmer, president of Stelco Steel and soon-to-be chairman and chief executive officer of its parent, said in an interview here. "The economic climate has really put us between the classic rock and hard place."

"The problem in Canada is government-inflicted, not industry-inflicted," adds Leo Gerard, Ontario director of the United Steelworkers of America. …

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